Soybeans shift significantly higher

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Afternoon report: Wheat prices also firm on Friday, with corn trending moderately lower.

Fresh U.S. export optimism, coupled with a downturn in Brazilian exports, helped push soybean prices substantially higher on Friday, with July contracts capturing gains of around 2%. Wheat prices were also in the green as traders continue to consider lower production estimates and poor crop quality noted in recent USDA report, including yesterday’s World Agricultural Supply and Demand Estimates (WASDE) report. Corn failed to follow suit after a round of technical selling, meantime, closing with losses of almost 1.25%.

The latest 72-hour cumulative precipitation map from NOAA shows scattered rains likely across much of the Corn Belt between Saturday and Tuesday, with the Northern Plains not expecting trace amounts or no moisture during this time. NOAA’s 8-to-14-day outlook predicts seasonally wet weather returning to large portions of the Midwest and Plains between May 20 and May 26, with warmer-than-normal conditions likely for much of the Corn Belt.

On Wall St., the Dow finally showed some signs of relief after slumping lower for much of the week, tracking 198 points higher in afternoon trading to 31,928. Unfortunately, the Dow is still almost certain to close lower for the seventh consecutive week, a feat that hasn’t been “achieved” since 2001. Energy futures jumped higher. Crude oil rose 3.75% this afternoon to $110 per barrel on fears of an EU ban of Russian supplies. Gasoline climbed 4% higher, with diesel only making moderate inroads. The U.S. Dollar softened slightly.

On Thursday, commodity funds were net buyers of corn (+8,500), soybeans (+3,500) and CBOT wheat (+25,000) contracts but were net sellers of soymeal (-500) and soyoil (-2,000)

Did you miss the big WASDE report yesterday? Be sure to read our recap, which is always published minutes after the report is released and is updated several times soon after that. Next, be sure to listen to this audio interview with Farm Futures grain market analyst Jacqueline Holland for additional key insights and takeaways to consider.

Corn

Corn prices dipped moderately lower on a round of technical selling and profit taking partly spurred by an abundance of friendlier weather this week that should have many more planters rolling in earnest. Prices remain historically high despite today’s setback. May futures faded 19 cents lower to $7.9450, with July futures down 9.75 cents to $7.8175.

Corn basis bids were steady to mixed across the central U.S. after dropping 7 cents at an Illinois river terminal while firming 3 to 6 cents higher at two other Midwestern locations today.

Brazil’s Conab lowered its total corn production estimates for 2021/22 by around 37 million bushels, for a new total of 4.511 billion bushels. This is a correction from an earlier statement suggesting corn production potential was on the rise, reaching 4.574 billion bushels.

Ukraine’s agriculture minister says the country’s monthly grain export capacity is limited to 1.5 million metric tons (the equivalent of approximately 59 million bushels of corn or 55 million bushels of wheat) amid the ongoing Russian invasion. Before the current Black Sea blockade, Ukraine’s exports were more than three times that amount per month. The country is limited to rail exports at this time.

French farm office FranceAgriMer reports that the country’s 2022 corn plantings are nearly complete, with 92% progress through May 9.

If you haven’t visited FarmFutures.com in a few days, our Friday feature “7 ag stories you might have missed” is a quick way to catch up on the industry’s top headlines. The latest batch of content includes stories on President Biden’s recent trip to rural Illinois to discuss a $500 million domestic fertilizer grant, a primer on how to scout for corn foliar diseases and more. Click here to get started.

Preliminary volume estimates were for 250,452 contracts, spilling 31% below Thursday’s final count of 363,149.

Soybeans

Soybean prices captured ample gains on a round of technical buying after traders returned their focus on relatively tight domestic and global stocks. A new flash sale to China announced this morning lent additional support. May futures climbed 63 cents higher to $17.2350, while July futures rose 32.5 cents to $16.4625.

Soybean basis bids were steady to mixed across the central U.S. on Friday after firming 5 cents at an Indiana processor while sliding 4 to 8 cents lower at two other Midwestern locations today.

Private exporters announced to USDA the sale of 4.9 million bushels of soybeans for delivery to China during the 2021/22 marketing year, which began September 1.

Brazil’s Safras & Mercado estimates that the country’s 2022 soybean exports will reach 2.737 billion bushels, is a 4.5% reduction from its prior estimate of 2.866 billion bushels. Brazil’s total soybean crush this year could reach 1.760 billion bushels.

China plans to auction off 18.4 million bushels of its state soybean reserves a week from today as it attempts to quell high prices with an influx of domestic supplies. China has held a dozen or more similar auctions so far in 2022.

Preliminary volume estimates were for 138,534 contracts, tracking slightly below Thursday’s final count of 148,769.

Wheat

Wheat prices continued to operate in a highly bullish environment on Friday, as the focus remains on poor U.S. crop quality and USDA reporting lower-than-expected production estimates yesterday. Severe challenges with exporting grain in Ukraine continues to lend plenty of support. July Chicago SRW futures picked up 1.25 cents to $11.80, July Kansas City HRW futures rose 14.25 cents to $12.8425, and July MGEX spring wheat futures added 9.5 cents to $13.2550.

Citing “preliminary estimates,” Russian president Vladimir Putin announced Thursday that the country could see a record-breaking wheat production this season, with 3.197 billion bushels, topping the prior best effort in 2017. Russia is the world’s No. 1 wheat exporter.

An emerging drought in France is beginning to cause quality problems for the country’s soft wheat crop, which moved from 89% rated in good-to-excellent a week ago down to 82% through May 9, per the FranceAgriMer farm office. That’s still a bit better than year-ago ratings of 79%, however.

Preliminary volume estimates were for 70,395 CBOT contracts, moving xx% below Thursday’s final count of 108,974

 

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