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Wheat prices continue to slump lower

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Afternoon report: Corn also falls into the red, while soybeans reap moderate gains on Monday

Grain prices were mixed but mostly lower as positive momentum seems hard to come by these days. That’s especially true for wheat, which spilled another 2% to 2.75% lower today as harvest progress across the Northern Hemisphere continues to erase worries over tight global stocks. Corn prices also trended lower, due in large part to farm-friendly forecasts as June winds to a close. Soybeans bucked the overall trend, firming nearly 1.5% as old crop stocks remain quite tight.

Outside of Minnesota, Wisconsin and Michigan, almost no measurable moisture is expected to land on the central U.S. between Tuesday and Friday, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts a return to seasonally wet weather for parts of the Corn Belt between July 4 and July 10, with plenty of warmer-than-normal conditions likely next week.

On Wall St., the Dow tilted 59 points lower in afternoon trading to 31,441 as investors struggle to determine whether stocks are currently oversold or not. Energy futures were mixed. Crude oil firmed nearly 2% higher this afternoon to surpass $109 per barrel. In contrast, diesel crumbled 3% lower, with gasoline down 1.25%. The U.S. Dollar softened moderately.

On Friday, commodity funds were net buyers of corn (+9,500), soybeans (+7,500), soymeal (+3,000) and soyoil (+5,000) contracts but were net sellers of CBOT wheat (-5,000).

Corn

Corn prices faded on favorable weather forecasts, which trimmed July futures 1% and slashed September futures by more than 3% on the ensuing round of technical selling. July futures lost 7 cents to $7.4325, while September futures lost 21.75 cents to $6.61.

Corn basis bids were mostly steady to firm on Monday, jumping as much as 20 cents higher at an Indiana ethanol plant today. An Illinois river terminal bucked the overall trend after fading 3 cents lower.

Corn export inspections reached 49.1 million bushels last week, moving slightly higher week-over-week. That was on the very high end of trade estimates, which ranged between 35.4 million and 49.2 million bushels. Japan was the No. 1 destination, with 18.8 million bushels. Cumulative totals for the 2021/22 marketing year remain substantially behind last year’s pace, with 1.867 billion bushels since the beginning of last September.

Ahead of this afternoon’s crop progress report from USDA, analysts think the agency will lower corn quality ratings by one point, with 69% of the crop rated in good-to-excellent condition through June 19. Individual trade guesses ranged between 67% and 70%.

Brazil’s AgRural consultancy slightly lowered its estimates for the country’s second corn crop, sliding to 3.161 billion bushels. However, the group slightly raised its estimates for total 2021/22 Brazilian corn production to 4.480 billion bushels.

Taiwan issued an international tender to purchase 2.6 million bushels of animal feed corn sourced from the United States, South America or South Africa and closes on Wednesday. The grain is for shipment beginning in late August, depending on origin.

Preliminary volume estimates were for 408,829 contracts, inching slightly above Friday’s final count of 406,936.

Soybeans

Soybean prices followed soymeal and soyoil prices higher as the focus remains on tight old crop supplies. Soybeans rose more than 1%, with soyoil up 1.75% and soymeal climbing 2.75% higher today. July soybean futures rose 22.5 cents to $16.3325, with August futures up 10.25 cents to $15.31.

Soybean basis bids were largely steady across the central U.S. on Monday but did tilt 3 cents lower at an Illinois river terminal and 5 cents lower at an Indiana processor today.

Soybean export inspections improved slightly week-over-week, reaching 17.2 mil-lion bushels. It was also toward the higher end of analyst estimates, which ranged between 11.0 million and 21.1 million bushels. Germany topped all destinations, with 5.5 million bushels. Cumulative totals for the 2021/22 marketing year are still running moderately below last year’s pace, with 1.887 billion bushels.

Prior to this afternoon’s crop progress report from USDA, analysts expect the agency to show soybean plantings moving from 94% a week ago up to 98% through Sunday. Quality ratings are expected to hold steady, with 68% of the crop rated in good-to-excellent condition.

Preliminary volume estimates were for 184,284 contracts, sliding slightly below Friday’s final count of 200,096.

Wheat

Wheat prices continued to struggle on Monday, with harvest pressure overriding ongoing concerns about Ukraine’s production and export potential. Winter wheat contracts fell 2% today, with spring wheat contracts down more than 2.75%. July Chicago SRW futures fell 18.25 cents to $9.0550, July Kansas City HRW futures dropped 19.25 cents to $9.7325, and July MGEX spring wheat futures lost 30 cents to $10.4075.

Wheat export inspections saw fractional week-over-week improvements after bringing in 12.9 million bushels. That was on the lower end of trade estimates, how-ever, which ranged between 11.0 million and 22.0 million bushels. Mexico was the No. 1 destination, with 3.6 million bushels. Cumulative totals for the 2022/23 marketing year have started slightly below last year’s pace, with 49.2 million bushels.

Ahead of USDA’s crop progress report, out later this afternoon, analysts expect to see a one-point improvement in spring wheat conditions, with 60% of the crop rated in good-to-excellent condition through Sunday. Winter wheat quality is also expected to firm a point higher, with 31% rated in good-to-excellent condition.

Russian consultancy Sovecon estimates that the country’s wheat exports will reach 40.4 million bushels in June. If realized, that would be the lowest monthly tally in more than a year. Russia is the world’s No. 1 wheat exporter.

Saudi Arabia’s state grain buyer has purchased 18.2 million bushels of wheat from optional origins in an international tender that closed last Friday. The grain is for shipment between November and January.

Egypt reached an agreement with India to purchase 6.6 million bushels of wheat, according to a statement from the country’s supply minister, who added that Egypt’s strategic wheat reserves should be sufficient to cover the next six months.

Bangladesh issued a new international tender to purchase 1.8 million bushels of milling wheat from optional origins that closes July 14. Another tender for the same amount will close on July 5. The grain will be for shipment 40 days after a contract is signed.

Jordan issued an international tender to purchase 4.4 million bushels of milling wheat from optional origins that closes tomorrow. The grain is for shipment starting in late September.

Taiwan issued an international tender to purchase 1.5 million bushels of grade 1 milling wheat sourced from the United States that closes on Wednesday. The grain is for shipment in August.

Preliminary volume estimates were for 99,098 CBOT contracts, moving slightly ahead of Friday’s final count of 98,004.

Settlement Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel      
22-Jul 746.25 731 744.25 -7
22-Sep 671.75 654 661.25 -21.75
Soybeans        
22-Jul 1636.25 1593 1630.5 22.5
22-Sep 1460.25 1424 1452 6.75
Soymeal                $/ton        
22-Aug 417.1 408 414.6 3.4
Soyoil                    cents/lb        
22-Aug 68.42 65.14 67.85 1.03
Wheat                    $/bushel        
22-Jul 940 900.5 904 -18.25
22-Sep 952.25 913.5 917.5 -17.75
KC Wheat        
22-Jul 1003.5 971.5 972.75 -19.25
22-Sep 1009.75 977.5 978.75 -19.25
MPLS Wheat        
22-Jul 1077.5 1038 1041.5 -30
22-Sep 1077.5 1040.75 1044.5 -29.75
Live Cattle             cents/lb        
22-Jun 136.5 134.9 136.35 1
Feeder Cattle         cents/lb        
22-Sep 177.9 175.35 176.8 1.725
Lean Hogs             cents/lb        
22-Aug 108.7 104.65 104.8 -1.975
Crude Oil  $/barrel *Energy prices may not represent final settlements
22-Aug 110.54 105.6 109.36 1.74
Diesel        
22-Jul 4.3773 4.2173 4.2282 -0.1347
Unleaded Gasoline   $/gallon        
22-Jul 3.9293 3.8119 3.8124 -0.0724
Natural Gas        
22-Aug 6.597 6.065 6.545 0.264
U.S. Dollar Index        
22-Sep 103.995 103.42 103.68 -0.279
Gold                      $/ounce        
22-Jul 1837.3 1818 1822.9 -3.6
Copper        
22-Jun 3.803 3.752 3.755 -0.005
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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