Planting pressure pushes corn prices lower

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Afternoon report: Wheat also spills into the red, with soybeans moving modestly higher

Grain prices were mixed but mostly lower on Tuesday. Corn prices crumbled 2% lower after USDA’s latest data showed faster-than-expected planting progress, which triggered a round of technical selling. Some wheat contracts slumped as much as 3% lower, incurring losses for four out of the past five sessions as fresh supplies from the Northern Hemisphere will soon come online. Soybeans bucked the overall trend, capturing modest gains by the close.

More wet weather is ahead later this week, with large portions of the Corn Belt set to receive 1” or more between Wednesday and Saturday, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts more seasonally wet weather for the central U.S. between May 31 and June 6, with cooler-than-normal conditions returning to the Northern Plains and upper Midwest likely.

On Wall St., the Dow tipped 64 points lower in afternoon trading to 31,815. Social media stocks were on their heels after a company called Snap crumbled 41% lower, causing a cascade of spillover weakness. Energy futures trended were mixed but mostly higher in mid-afternoon trading. Crude oil was near-even from a day ago, at $110 per barrel. Gasoline and diesel made modest inroads. The U.S. Dollar softened moderately.

On Monday, commodity funds were net buyers of corn (+5,000) and CBOT wheat (+9,000) contracts but were net sellers of soybeans (-8,000), soymeal (-3,500) and soyoil (-1,500).

Corn

Corn prices faded fast on Tuesday after USDA’s latest planting data led to a round of technical selling. Spillover weakness from wheat applied additional headwinds today. July futures fell 16.25 cents to $7.70, with September futures down 14.75 cents to $7.40.

Corn basis bids were steady to firm on Tuesday after rising 2 to 10 cents higher across three Midwestern locations today.

Corn plantings are 72% complete through Sunday, up from 49% a week ago and four points above the average trade guess of 68%. However, this year’s progress is still markedly slower than 2021’s pace of 89% and the prior five-year average of 79%. Emergence moved to 39%, up from 14% a week ago but still substantially behind 2021’s pace of 61% and the prior five-year average of 51%.

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Brazil’s Anec estimates that the country will export 48.9 million bushels of corn in May. That is slightly lower than its prior projection from a week ago. Brazilian wheat exports are expected to come in around 4.0 million bushels this month.

The European Commission reported that through May 22, 2021/22 EU corn imports reached 577.1 million bushels – a year-over-year increase of 7.5% so far.

Preliminary volume estimates were for 281,232 contracts, jumping 67% ahead of Monday’s final count of 168,645.

Soybeans

Soybean prices made it through a choppy session with modest gains Tuesday, although prices were in the red for part of the day. Traders remain relatively bullish as they continue to assess tightening domestic and global supplies. July futures added 5 cents to $16.92, with August futures up 2.5 cents to $16.3125.

Soybean basis bids were mostly steady to firm across the central U.S. after rising 3 to 10 cents higher at three Midwestern locations on Tuesday. An Iowa processor bucked the overall trend after dropping 5 cents today.

Soybean plantings reached 50% through Sunday, up from 30% a week ago and slightly besting the average trade guess of 49%. That still puts this year’s crop well below 2021’s pace of 73% and five points below the prior five-year average of 55%. Twenty-one percent of the crop is now emerged, up from 9% a week ago. Last year’s pace was faster, at 38%, and the prior five-year average is 26%.

Brazil’s Anec estimates that the country will export 414.4 million bushels of soybeans in May. That’s down slightly from its last estimate from a week ago. Brazilian soymeal exports are expected to reach 1.903 million metric tons this month.

European Union soybean imports for the 2021/22 marketing year reached 471.4 million bushels through May 22, which is a year-over-year decrease of 5.1% so far. Eu soymeal imports are also down from a year ago, with 14.47 million metric tons during the same period.

Ukrainian consultancy APK-Inform lowered its estimates for 2022/23 sunflower oil production by 7% to 5.3 million metric tons. The world’s largest sunflower oil harvested 16.6 million MT last season but is only expected to produce 9.2 million MT this season.

Preliminary volume estimates were for 132,422 contracts, trending moderately lower than Monday’s final count of 162,068.

Wheat

Wheat prices continued to face significant downward pressure today, falling again for the fourth time over the past five sessions. Losses ranged between 1.75% and 3%. July Chicago SRW futures fell 35.5 cents to $11.5450, July Kansas City HRW futures lost 39.5 cents to $12.37, and July MGEX spring wheat futures dropped 25 cents to $12.7350.

Spring wheat plantings made it to 49%, up from 39% a week ago. That was well below the average trade guess of 56%. It’s also well below 2021’s pace of 93% and the prior five-year average of 83%.

Winter wheat quality ratings improved a point and matched analyst expectations with 28% of the crop rated in good-to-excellent condition, making it among the worst on record. Another 32% of the crop is rated fair (unchanged from a week ago), with the remaining 40% rated poor or very poor (down a point from last week). Physiologically, 63% of the crop is headed, versus week-ago results of 48%.

European Union soft wheat exports for the 2021/22 marketing year reached 886.6 million bushels through May 22, which is trending fractionally below last year’s pace. EU barley exports are slightly below year-ago results, with 310.0 million bushels.

Jordan made no purchases in its latest international tender for 4.4 million bushels of milling wheat that closed earlier today. The country has struggled to close deals on similar tenders earlier this year. Traders speculate that Jordan will issue a new tender that will close on June 2.

Preliminary volume estimates were for 93,670 CBOT contracts, rising moderately above Monday’s final count of 63,088.

Settlement Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel      
22-Jul 787 762 771.75 -16.25
22-Sep 754.75 730.75 741 -14.75
Soybeans        
22-Jul 1696.75 1673.5 1693 5
22-Sep 1563.25 1548 1559.25 -0.25
Soymeal                $/ton        
22-Aug 422.8 415.7 421.6 2.9
Soyoil                    cents/lb        
22-Aug 78.77 77.43 77.73 -0.24
Wheat                    $/bushel        
22-Jul 1208.75 1138 1154.75 -35.5
22-Sep 1216 1146.75 1163.25 -34.5
KC Wheat        
22-Jul 1291.5 1219.25 1237.75 -39.5
22-Sep 1295.25 1223.5 1242.5 -38.75
MPLS Wheat        
22-Jul 1321.75 1253 1277.25 -25
22-Sep 1319.75 1253 1277 -22.75
Live Cattle             cents/lb        
22-Jun 133.225 132.575 133 0.225
Feeder Cattle         cents/lb        
22-Aug 169 166.15 168.425 2.8
Lean Hogs             cents/lb        
22-Jul 110.875 107.625 108.75 -2.1
Crude Oil  $/barrel *Energy prices may not represent final settlements
22-Jun 111.43 108.61 110.19 -0.1
Diesel        
22-Jun 3.8478 3.7031 3.7858 0.017
Unleaded Gasoline   $/gallon        
22-May 3.8165 3.6278 3.8099 0.0122
Natural Gas        
22-Jul 9.014 8.683 8.805 -0.022
U.S. Dollar Index        
22-Jun 102.335 101.655 101.865 -0.232
Gold                      $/ounce        
22-Jun 1869.1 1847.6 1864.6 16.8
Copper        
22-May 4.3415 4.26 4.3415 -0.006
Fertilizer Swaps     (as of 05/20)  
DAP Tampa-index           1,117.5 -12.5
DAP-New Orleans              920.4 -15.43
Urea-New Orleans              691.7 -13.78
Urea-Middle East              708.5 -14
Urea-Black Sea              585.0 35
UAN (32%) New Orleans              689.0 -5.51

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