Soybeans surge on planting concerns

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Afternoon report: Spring wheat also moves higher, while corn and winter wheat fade lower

Grain prices were decidedly mixed on Thursday. Soybeans captured significant gains on a round of technical buying largely spurred by worries over planting delays in Minnesota and the Dakotas amid unfavorable weather conditions for much of the spring. Corn prices failed to follow suit, as some technical selling pushed them down around 1% today. Winter wheat prices were also in the red, while spring wheat contracts firmed nearly 1% higher.

Scattered rains are possible across parts of the Midwest and Plains between Friday and Monday, per the latest 72-hour cumulative precipitation map from NOAA. The upper Midwest and far eastern Corn Belt are likely to see the highest totals during this time. NOAA’s new 8-to-14-day outlook predicts near-normal precipitation for most of the central U.S. between June 2 and June 8, with seasonally cool weather likely for the Northern Plains and upper Midwest.

Wall St. has been on its heels in recent weeks, but the Dow trended 579 points higher this afternoon to 32,699 as it hopes to shake off an eight-week losing streak. Energy futures also jumped higher today, with crude oil climbing 3.75% to $114 per barrel on tightening domestic supplies. Diesel rose 3.25%, with gasoline up 2%. The U.S. Dollar softened moderately.

On Wednesday, commodity funds were net sellers of all major grain contracts, including corn (-3,500), soybeans (-7,000), soymeal (-2,500), soyoil (-4,500) and CBOT wheat (-4,500).

Corn

Corn prices suffered a technical setback that caused a 1% drop by the close on Thursday. A much lower-than-expected round of export sales data from USDA was largely to blame. July futures fell 8.75 cents to $7.6350, with September futures down 7.5 cents to $7.3225.

Corn basis bids were steady to firm across the central U.S. again on Thursday after rising 5 to 10 cents higher at three Midwestern locations today.

Old crop corn sales reached 6.0 million bushels for the week ending May 19 – a marketing-year low – with new crop sales only adding another 2.3 million bushels, bringing the total tally to 8.3 million bushels. That was definitively below trade guesses, which ranged between 13.8 million and 51.2 million bushels. Cumulative sales for the 2021/22 marketing year are still running moderately behind last year’s pace, with 1.761 billion bushels.

Corn export shipments were much more robust, trending 15% higher than the prior four-week average to 71.7 million bushels. China was the No. 1 destination, with 31.2 million bushels.

Russia’s war in Ukraine has caused a global shakeup in fertilizer prices and has many country’s shuffling their sources this coming season. For a deeper dive on the exact effects, be sure to read part three in this week’s “Black Swan in the Black Sea” series from Farm Futures grain market analyst Jacqueline Holland – click here to learn more.

South African corn production is expected to trend nearly 10% lower year-over-year, with the country’s Crop Estimates Committee now expecting a total harvest of 579.6 million bushels. South Africa is the continent’s top corn producer.

Turkey has made provisional purchases of 6.4 million bushels of animal feed corn from optional origins that closed earlier this week. The purchases are still subject to final confirmation, and the grain is for shipment in June.

Preliminary volume estimates were for 213,070 contracts, sliding below Wednesday’s final count of 250,792.

Soybeans

Soybean prices found substantial gains on mounting concerns over the lack of planting progress so far this season. Through Sunday, just 39% of the crop was in the ground, versus the prior five-year average of 51%, and wet weather has kept a lot of planters from rolling since then. July futures climbed 44.75 cents to $17.2575, with August futures up 38 cents to $16.5850.

Soybean basis bids were narrowly mixed at two Midwestern processors on Thursday while holding steady elsewhere across the central U.S. today.

Old crop soybean sales fell 63% lower week-over-week to 10.2 million bushels. New crop sales contributed another 16.3 million bushels, for a total of 26.5 million bushels. That was toward the lower end of analyst estimates, which came in between 11.0 million and 51.4 million bushels. Cumulative totals for the 2021/22 marketing year are still trending almost 300 million bushels below last year’s pace, with 1.810 billion bushels.

Soybean export shipments eroded 44% lower from a week ago, falling to 19.8 mil-lion bushels. China was the No. 1 destination, with 6.2 million bushels.

China’s National Grain Trade Center announced it will auction off another 18.4 million bushels of its imported soybean reserves on June 1 to boost local supplies. The country has offered a series of similarly sized soybean auctions throughout 2022 so far.

The Biden administration proposed a new rule to help poultry producers, which is part of a broader effort to address concentration in agricultural markets. “For too long, farmers and ranchers have seen the value and the opportunities they work so hard to create move away from the rural communities where they live and operate,” says Secretary of Agriculture Tom Vilsack. “The funding and new rule we’re announcing today ultimately will help us give farmers and ranchers a fair shake, strengthen supply chains and make food prices fairer.” Farm Futures policy editor Jacqui Fatka did some additional investigating – click here to learn more.

Preliminary volume estimates were for 248,146 contracts, jumping ahead of Wednesday’s final count of 154,760.

Wheat

Wheat prices were mixed amid an uneven round of technical maneuvering on Thursday. A terrible set of export sales data from USDA caused winter wheat contracts to erode moderately lower, while a sluggish planting pace kept spring wheat contracts moving higher. July Chicago SRW futures fell 6.25 cents to $11.42, July Kansas City HRW futures dropped 6.5 cents to $12.2675, and July MGEX spring wheat futures firmed 11.5 cents to $12.92.

Old crop wheat sales fell to a marketing-year low after facing small net reductions after cancellations from Mexico and unknown destinations more than offset sales to Italy, Nigeria and the Philippines. New crop sales reached 9.0 million bushels, for a net total of 9.0 million bushels. That kept results near the middle of trade guesses, which ranged between 1.8 million and 18.4 million bushels. Cumulative totals for the 2021/22 marketing year are still moderately below last year’s pace, with 667.2 million bushels.

Wheat export shipments slipped 1% below the prior four-week average, with just under 11.0 million bushels. Japan was the top destination, with 4.0 million bushels.

Who is to blame for a looming global food crisis? Russia is pointing fingers at the West after the United Nations scolded the country for blockading Ukrainian ports. “We categorically reject these accusations and, on the contrary, accuse Western countries that they have taken a number of illegal actions that led to this,” according to a Kremlin spokesperson. Russia and Ukraine combined account for nearly one-third of the world’s wheat exports.

India exported $650 million worth of wheat in March and April before announcing it would restrict certain sales moving forward as it deals with a local crop damaged by recent drought and heat.

Preliminary volume estimates were for 66,351 CBOT contracts, falling moderately below Wednesday’s final count of 93,579.

Settlement Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel      
22-Jul 772.5 757.5 765 -8.75
22-Sep 740.75 725.25 734 -7.5
Soybeans        
22-Jul 1737 1667.25 1726.5 44.75
22-Sep 1591.25 1537.5 1584.5 34.5
Soymeal                $/ton        
22-Aug 425.8 415.5 422.7 4.1
Soyoil                    cents/lb        
22-Aug 78.73 76.25 78.4 1.41
Wheat                    $/bushel        
22-Jul 1160.25 1115 1143.25 -6.25
22-Sep 1168.75 1123.5 1152 -6.25
KC Wheat        
22-Jul 1249 1206.75 1228.5 -6.5
22-Sep 1254 1212.25 1234 -6
MPLS Wheat        
22-Jul 1300 1256.25 1292.25 11.5
22-Sep 1298.75 1255.75 1291.75 11.5
Live Cattle             cents/lb        
22-Jun 132.575 131.95 132.55 0.25
Feeder Cattle         cents/lb        
22-Aug 168.575 166.1 166.8 -1.15
Lean Hogs             cents/lb        
22-Jul 112.025 106.65 111.775 3.825
Crude Oil  $/barrel *Energy prices may not represent final settlements
22-Jun 114.83 110.27 113.98 3.65
Diesel        
22-Jun 3.9982 3.8526 3.9642 0.0978
Unleaded Gasoline   $/gallon        
22-May 3.927 3.8153 3.8715 0.0398
Natural Gas        
22-Jul 9.447 8.626 8.676 -0.317
U.S. Dollar Index        
22-Jun 102.29 101.79 101.875 -0.202
Gold                      $/ounce        
22-Jun 1855 1840.4 1850.5 4.2
Copper        
22-May 4.2575 4.2575 4.2575 -0.0195
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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