Wheat prices capture limit-up gains

phongphan5922/Thinkstock markets charts - green with red line
Afternoon report: Corn and soybeans also make solid inroads in Monday’s session.

Wheat prices surged to limit-up gains on Monday after India announced over the weekend it will no longer be exporting wheat due to likely heat-related damages to its domestic crop. The ensuing spillover strength helped corn and soybeans also trend higher. Corn prices jumped 3.5% higher on a wave of technical buying, while soybeans picked up gains of around 0.5%.

Most of the Midwest and Plains should receive at least some measurable moisture between Tuesday and Friday, although very few places are likely to see more than 0.75” at this time, per the latest 72-hour cumulative precipitation map from NOAA. Seasonally wet weather is also probable for the eastern half of the U.S. between May 23 and May 29, according to NOAA’s new 8-to-14-day outlook, with cooler-than-normal conditions returning to the Northern Plains and upper Midwest.

On Wall St., the Dow made initial inroads to stop a six-week slide, rising 299 points in afternoon trading to 32,496. Concerns over high inflation and rising interest rates still lurk in the background, however. Energy futures trended higher, with crude oil up 3.75% to $114 per barrel this afternoon. Gasoline rose 1.5%, with diesel tracking around 0.25% higher. The U.S. Dollar softened moderately.

On Friday, commodity funds were net buyers of soybeans (+12,000), soymeal (+7,500) and soyoil (+3,500) contracts but were net sellers of corn (-8,000) and CBOT wheat (-1,000).

Corn

Corn prices followed wheat and energy prices higher, with limit-up wheat gains in particular spurring a round of technical buying today. The latest round of export inspection data was unimpressive but at least stayed within the range of trade estimates. July futures rose 27.25 cents to $8.0850, with September futures up 20 cents to $7.7750.

Corn basis bids were steady to mixed across the Midwest on Monday, moving as much as 5 cents higher at an Illinois river terminal and as much as 10 cents lower at an Illinois processor today.

Corn export inspections totaled 40.8 million bushels last week, sliding 30% below the prior week’s tally and tracking on the lower end of trade guesses, which ranged between 29.5 million and 68.9 million bushels. South Korea was the No. 1 destination, with 10.2 million bushels. Cumulative totals for the 2021/22 marketing year remain well behind last year’s pace, with 1.539 billion bushels.

Ahead of this afternoon’s crop progress report from USDA, analysts expect to see a big improvement in corn plantings, moving from 22% a week ago up to 49% through May 15. Individual trade guesses ranged between 43% and 58%.

USDA announced it has $6 billion in emergency relief payments ready for farmers who incurred damages from natural disasters such as wildfires, hurricanes, flooding and drought in 2020 and 2021. Additional information, including eligibility requirements, can be found here.

Preliminary volume estimates were for 283,146 contracts, tracking 13% higher than Friday’s final count of 250,452.

Soybeans

Soybean prices survived a choppy session Monday to trend more than 0.5% after a round of net technical buying largely due to spillover strength from other commodities. July futures added 9.5 cents to $16.56, with August futures up 10.75 cents to $16.0625.

Soybean basis bids were largely unchanged across the central U.S. on Monday but did jump 25 cents higher at an Iowa processor today.

Soybean export inspections improved to 28.8 million bushels last week, up from 18.5 million bushels the prior week. It was also on the very high end of trade estimates, which ranged between 9.2 million and 29.4 million bushels. Egypt topped all destinations, with 10.0 million bushels. Cumulative totals for the 2021/22 marketing year are still well below the prior year’s pace, with 1.782 billion bushels.

Ahead of the next USDA crop progress report, out later this afternoon, analysts expect to see soybean plantings move from 12% completion a week ago to 29% through May 15. Individual trade guesses ranged between 25% and 36%.

The National Oilseed Processors Association (NOPA) released its latest round of crushing data this morning, noting an April crush of 169.788 million bushels. That was down 6.6% from March but 5.9% higher year-over-year. Analysts were generally expecting to see a larger total, offering an average trade guess of 172.370 million bushels. Soyoil stocks fell to the lowest totals since last September, with 1.814 billion pounds.

Preliminary volume estimates were for 108,486 contracts, fading moderately below Friday’s final count of 138,534.

Wheat

Wheat prices saw limit-up gains to start the week after India recently announced it will curb future wheat exports after enduring a crop-damaging heatwave. The move also sent European futures soaring as global availability is expected to be historically tight until other major exporters can harvest this season’s crops. July Chicago SRW futures climbed 70 cents to $12.4750, July Kansas City HRW futures rose 70 cents to $13.52, and July MGEX spring wheat futures climbed 60 cents to $13.85 – all notching new contract highs.

Wheat export inspections firmed moderately above the prior week’s tally to reach 12.8 million bushels. That was also on the higher end of trade estimates, which ranged between 3.7 million and 14.7 million bushels. Mexico was the No. 1 destination, with 2.7 million bushels. Cumulative totals for the 2021/22 marketing year remain moderately behind last year’s pace, with 712.0 million bushels.

Ahead of this afternoon’s weekly crop progress report from USDA, analysts hope to see winter wheat quality improve a point, moving to 30% rated in good-to-excellent condition through May 15. For spring wheat, analysts think USDA will show planting progress at 43%, up from 27% a week ago.

A heatwave in India has prompted the country to ban wheat exports after selling a record 51.4 million bushels last month, attracting buyers from a variety of regions. This is a big reversal from India’s prior plans to export as much as 367 million bushels of wheat this year to compensate for Ukraine’s limited export ability amid the Russian invasion.

And in Russia, the country’s Sovecon consultancy is estimating May wheat exports will reach 36.7 million bushels. That’s less than half of April’s total of 80.8 million bushels but more than double year-over-year results of 16.8 million bushels, if realized. Russia is the world’s No. 1 wheat exporter.

Pakistan issued an international tender to purchase 18.4 million bushels of wheat from optional origins that closes on May 25. Shipment is sought for June and July.

Preliminary volume estimates were for 122,933 CBOT contracts, which was close to doubling Friday’s final count of 70,395.

Settlement Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel      
22-Jul 810.25 792.75 809.5 27.25
22-Sep 778.75 766.25 778 20
Soybeans        
22-Jul 1668 1650.25 1656.5 9.5
22-Sep 1555.5 1538 1546.5 12.75
Soymeal                $/ton        
22-Aug 411.2 407.2 409.1 4.4
Soyoil                    cents/lb        
22-Jul 84.64 82.47 82.99 -0.67
Wheat                    $/bushel        
22-Jul 1247.5 1222.25 1247.5 70
22-Sep 1251 1224.25 1251 70
KC Wheat        
22-Jul 1352 1325 1352 70
22-Sep 1353.75 1325.5 1353.75 70
MPLS Wheat        
22-Jul 1385 1356.25 1385 60
22-Sep 1378.75 1352 1378.75 60
Live Cattle             cents/lb        
22-Jun 133.4 131.75 133.2 1.125
Feeder Cattle         cents/lb        
22-Aug 167.75 166 167.375 -0.65
Lean Hogs             cents/lb        
22-Jul 105.675 101.6 104.85 3.65
Crude Oil  $/barrel *Energy prices may not represent final settlements
22-Jun 114.9 108.11 113.68 3.19
Diesel        
22-Jun 3.9608 3.8372 3.8998 -0.0214
Unleaded Gasoline   $/gallon        
22-May 4.064 3.9146 4.0122 0.0544
Natural Gas        
22-Jul 8.276 7.765 8.093 0.328
U.S. Dollar Index        
22-Jun 104.7 104.175 104.19 -0.431
Gold                      $/ounce        
22-Jun 1822.5 1785 1795 -12.4
Copper        
22-May 4.2145 4.15 4.213 0.0325
Fertilizer Swaps     (as of 05/13)  
DAP Tampa-index           1,130.0 -45
DAP-New Orleans              935.9 -20.39
Urea-New Orleans              705.5 -8.27
Urea-Middle East              772.5 -72.5
Urea-Black Sea              585.0 0
UAN (32%) New Orleans              694.5 0

Get our top content delivered right to your inbox. Subscribe to our morning and afternoon newsletters!

Hide comments
account-default-image

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish