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Afternoon report: Grain markets mixed ahead of two key USDA reports coming out Thursday

Tomorrow morning (6/30), USDA will release two highly anticipated reports that provide valuable updates to grain stocks and crop acreage. Traders finished squaring some of their positions ahead of those reports, with mixed results. Nearby corn contracts firmed nearly 1.5%, with soybeans also finding moderate gains today. Wheat prices are still struggling to find forward momentum, meantime, with most contracts taking on moderate losses.

Scattered rains will continue to fall on the Midwest and Plains between Thursday and Sunday, but very few areas will gather much more than 0.25” during that time, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook shows seasonally wet weather will be likely for the eastern Corn Belt between July 6 and July 12, with widespread hotter-than-normal conditions across the central U.S.

On Wall St., the Dow shifted 181 points higher in afternoon trading to 31,128 as stocks move closer to the end of a mostly dismal Q2. Energy futures trended lower, with crude oil down more than 1% to $110 per barrel this afternoon. Diesel dropped 3%, with gasoline down around 2.5%. The U.S. Dollar firmed moderately.

On Tuesday, commodity funds were net buyers of all major grain contracts, including corn (+11,000), soybeans (+13,000), soymeal (+4,500), soyoil (+4,500) and CBOT wheat (+10,500).

Corn

Corn prices were mixed after some uneven technical maneuvering ahead of Thursday’ morning’s stock and acreage reports from USDA (more on that below). July futures firmed 10.75 cents to $7.7025, while September futures dropped 6 cents to $6.6375.

Corn basis bids were steady to soft across the central U.S. after spilling 3 to 15 cents lower at four Midwestern locations on Wednesday.

Prior to tomorrow morning’s export report from USDA, analysts offered a fairly wide range of guesses for corn sales, ranging between 11.8 million and 47.2 million bushels for the week ending June 23.

Ahead of Thursday morning’s quarterly stocks report from USDA, analysts are expecting to see corn supplies rise from 4.111 billion bushels a year ago up to 4.343 million bushels. Analysts are still expecting a sharp year-over-year decrease in 2022 corn acres, moving from year-ago totals of 93.357 million acres down to 89.861 million acres – making this season one of the very few times when soybean acres have surpassed corn acres.

South Korea purchased 5.4 million bushels of animal feed corn, likely sourced from South America, in an international tender that closed earlier today. The purchase is comprised of two consignments, both of which are for delivery in October.

Taiwan purchased 2.2 million bushels of animal feed corn, likely sourced from South Africa, in an international tender that closed earlier today. The grain is for shipment in September.

Preliminary volume estimates were for 279,626 contracts, shifting slightly below Tuesday’s final count of 308,272.

Soybeans

Soybean prices trended moderately higher on Wednesday after a round of technical buying lifted contracts 0.5% to 1% higher. However, traders will be watching USDA closely tomorrow morning as analysts are expecting to see stocks tighten while acreage could rise more than 3 million acres above 2021’s totals. July futures added 8.25 cents to $16.72, while August futures rose 16 cents to $15.7250.

Soybean basis bids fell 5 to 8 cents lower at three Midwestern locations on Wednesday but held steady elsewhere across the central U.S. today.

Ahead of tomorrow morning’s export report from USDA, analysts think the agency will show soybean sales ranging between zero and 29.4 million bushels for the week ending June 23. Analysts also expect to see soymeal sales ranging between 40,000 and 250,000 metric tons, plus up to 35,000 MT of soyoil sales.

Prior to tomorrow mornings quarterly stocks report from USDA, analysts are expecting to see soybean supplies rise to 965 million bushels, up from year-ago totals of 769 million bushels. Soybean plantings are expected to rise from 87.195 million acres a year ago to 90.446 million acres this season.

South Korea made no purchases in its international tender to purchase 120,000 metric tons of soymeal from optional origins, which closed on Tuesday. Bids were thought to have been too pricy. The grain would have been for arrival between late October and early November.

Preliminary volume estimates were for 165,490 contracts, sliding moderately below Tuesday’s final count of 210,251.

Wheat

Wheat prices were mixed but mostly lower amid an uneven round of technical maneuvering today, with some contracts falling more than 1.25% today. July Chicago SRW futures dropped 4.5 cents to $9.1675, July Kansas City HRW futures inched 0.75 cents higher to $9.8450, and July MGEX spring wheat futures eroded 14.25 cents lower to $10.2050.

Prior to the next USDA weekly export report, out Thursday morning, analysts expect the agency to show wheat sales ranging between 7.3 million and 22.0 million bushels for the week ending June 23.

Ahead of tomorrow morning’s grain stocks report from USDA, analysts think the agency will show wheat stocks at 655 million bushels, which would be down significantly from year-ago totals of 845 million bushels and the March 2022 tally of 1.025 billion bushels, if realized.

USDA will also update its all-wheat plantings data on Thursday. Last year’s final footprint was 46.703 million acres, with analysts expecting that number to rise to 47.017 million acres in 2022.

Russian consultancy Sovecon expects to see record wheat production in 2022/23, with a new estimate of 3.278 billion bushels. Russian exports are also expected to rewrite the record books, with an estimated 1.565 billion bushels. At the same time, Sovecon also admits complicating factors due to the country’s invasion of Ukraine, including the risk of sanctions and cautious shipowners worried about operating in a volatile region. Russia is the world’s No. 1 wheat exporter.

Jordan issued a new tender to purchase 4.4 million bushels of milling wheat from optional origins that closes July 5. The country has struggled to close similar deals in recent weeks due to high prices, although it did purchase 2.2 million bushels of milling wheat in a tender that closed yesterday.

Taiwan purchased 1.5 million bushels of milling wheat from the United States in a tender that closed earlier today. The grain is for shipment in August.

Preliminary volume estimates were for 93,280 CBOT contracts, which was modestly lower than Tuesday’s final count of 104,486.

Settlement Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel      
22-Jul 780 755.5 770.25 10.75
22-Sep 672.25 662.25 664 -6
Soybeans        
22-Jul 1684.25 1653 1674.25 8.25
22-Sep 1497 1468 1495 15.75
Soymeal                $/ton        
22-Aug 430.5 420 429.3 10.1
Soyoil                    cents/lb        
22-Aug 70.32 67.94 69.5 0.3
Wheat                    $/bushel        
22-Jul 940 913.75 915.5 -4.5
22-Sep 956 929 930 -4.25
KC Wheat        
22-Jul 1003.25 981 985.25 0.75
22-Sep 1010 987.75 991.25 3.25
MPLS Wheat        
22-Jul 1049.5 1015 1019.5 -14.25
22-Sep 1057 1025.25 1028.5 -12
Live Cattle             cents/lb        
22-Jun 137.05 136.1 136.175 -0.125
Feeder Cattle         cents/lb        
22-Sep 175.525 173.275 173.875 -1.075
Lean Hogs             cents/lb        
22-Aug 104.55 103 103.525 -0.3
Crude Oil  $/barrel *Energy prices may not represent final settlements
22-Aug 114.05 109.33 109.53 -2.23
Diesel        
22-Jul 4.2344 4.0291 4.0366 -0.1628
Unleaded Gasoline   $/gallon        
22-Jul 3.956 3.7566 3.8254 -0.1097
Natural Gas        
22-Sep 6.812 6.45 6.519 -0.038
U.S. Dollar Index        
22-Sep 104.86 104.14 104.86 0.599
Gold                      $/ounce        
22-Aug 1834.9 1810.7 1816 -1.5
Copper        
22-Jul 3.813 3.7075 3.7655 -0.0085
Fertilizer Swaps     (as of 06/24)  
DAP Tampa-index           1,090.0 0
DAP-New Orleans              876.3 -11.02
Urea-New Orleans              526.4 41.34
Urea-Middle East              682.5 47.5
Urea-Black Sea              585.0 35
UAN (32%) New Orleans              576.0 -25.35

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