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Wheat prices continue to struggle

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Afternoon report: Corn also down in Tuesday’s session, while soybeans jump higher

Grain prices were mixed but mostly lower on Tuesday. Soybeans saw plenty of upside after two more flash sales announced this morning boosted prices 1.25% higher after a round of technical buying. CBOT wheat prices slumped to their lowest levels in more than a year after cuts of around 1.25%, meantime, while corn faded around 0.5% lower.

Plenty more moisture is heading to the central U.S. between Wednesday and Saturday, with the Mid-South, Iowa and northern Illinois likely to see the highest levels or rain and/or snow during this time, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s new 8-to-14-day outlook predicts more seasonally wet weather for the Midwest and Plains between December 13 and December 19, with colder-than-normal temperatures likely for the western two-thirds of the country.

On Wall St., the Dow stumbled another 485 points lower in afternoon trading to 33,461 on lingering recession fears, with media and banking stocks turning in the poorest performances today. Energy futures continued their downward slide as well, with crude oil falling 3.5% this afternoon to $74 per barrel. Diesel dropped 3%, with gasoline down around 2.75%. The U.S. Dollar firmed moderately.

On Monday, commodity funds were net buyers of soybeans (+500) and soymeal (+3,500) contracts but were net sellers of corn (-4,000), soyoil (-7,500) and CBOT wheat (-7,000).

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Corn prices trended around 0.5% lower on Tuesday on a round of technical selling partly spurred by spillover weakness from waning wheat prices. December futures dropped 3.25 cents to $6.2550, with March futures down 3 cents to $6.3750.

Corn basis bids were mostly steady across the central U.S. on Tuesday but did slide 2 cents lower at an Illinois river terminal and 15 cents lower at an Indiana elevator today.

Ahead of the next WASDE report from USDA, out Friday morning, analysts think the agency will show corn ending stocks rising from 1.182 billion bushels in November up to 1.237 billion bushels in December. Individual trade guesses ranged between 1.182 billion and 1.330 billion bushels.

Did you know that new-crop corn futures are at the highest level at this time of year since 2012? Of course, there are many factors to consider other than just prices – including the high cost of inputs, South American production, the ongoing Russian invasion of Ukraine and much more, according to Brian Basting, commodity research analyst with Advance Trading. Basting serves up a fresh batch of analysis to consider in today’s Ag Marketing IQ blog – click here to learn more.

European Union corn imports during the 2022/23 marketing year have jumped 119% above last year’s pace so far, with just over 498 million bushels through December 4. Brazil, Ukraine, Serbia, Canada and South Africa were the top five suppliers.

South Korea purchased 5.1 million bushels of animal feed corn, likely sourced from South America, in an international tender that closed earlier today. The grain is for arrival in early March.

Taiwan issued an international tender to purchase 2.6 million bushels of animal feed corn, to be sourced from the United States, South America or South Africa, that closes on Wednesday. The grain is for shipment starting in February.

Preliminary volume estimates were for 245,124 contracts, which was slightly above Monday’s final count of 227,177.



Soybean prices captured double-digit gains on general export optimism after two more large flash sales were announced to USDA this morning. Prices firmed by about 1.25% by the close. January futures rose 18.75 cents to $14.5650, with March futures up 17.5 cents to $14.6250.

Soybean basis bids tumbled 30 cents lower at an Indiana elevator and dropped 5 cents at an Iowa river terminal while firming 2 cents at an Illinois river terminal and holding steady elsewhere across the central U.S. on Tuesday.

Private exporters announced two more large soybean sales to USDA on Tuesday. The first is for 9.7 million bushels to China, and the second is for 8.8 million bushels to unknown destinations. Both sales are for delivery during the 2022/23 marketing year, which began September 1.

Prior to Friday’s WASDE report from USDA, analysts expect the agency to show soybean ending stocks improve from 220 million bushels in November up to 238 million bushels in December. Individual trade guesses ranged between 220 million and 296 million bushels.

European Union soybean imports during the 2022/23 marketing year have reached 173.4 million bushels through December 4, which is around 12% below last year’s pace so far. The United States, Brazil, Ukraine, Canada and Uruguay were the top five suppliers. EU soymeal imports are now running slightly ahead of last year’s pace, with 6.89 million metric tons.

Preliminary volume estimates were for 240,278 contracts, climbing 60% above Monday’s final count of 150,328.



Wheat prices continued to spiral lower on Tuesday amid ongoing worries that U.S. prices are uncompetitive among several key overseas markets. CBOT futures are now at the lowest level in around 13 months. March Chicago SRW futures fell 8.25 cents to $7.3075, March Kansas City HRW futures lost 8.75 cents to $8.33, and March MGEX spring wheat futures dropped 4.5 cents to $8.9750.

Prior to Friday’s WASDE report from USDA, analysts expect the agency to show a modest monthly increase in U.S. wheat stocks, moving from 571 million bushels in November up to 576 million bushels in December. Individual trade guesses ranged between 551 million and 602 million bushels.

European Union soft wheat exports for the 2022/23 marketing year are trending 3.5% above last year’s pace, reaching 532.4 million bushels through December 4. Algeria, Morocco, Egypt, Nigeria and Saudi Arabia were the top five destinations. In contrast, EU barley exports are down 41% year-over-year, with 126.3 million bushels.

Japan issued a regular tender to purchase 5.7 million bushels of food-quality wheat from the United States, Canada and Australia that closes on Thursday. Of the total, around 41% is expected to be sourced from the U.S. The grain is for arrival starting in early March.

South Korea purchased 2.2 million bushels of animal feed wheat, likely sourced from Australia, in a private deal that closed earlier today. The grain is for shipment between March 23 and April 23.

A South Korean flour mill group purchased 1.8 million bushels of milling wheat from the United States in an international tender that closed earlier today. The grain is for shipment between mid-February and mid-March.

Preliminary volume estimates were for 82,810 CBOT contracts, moving slightly above Monday’s final count of 75,373.

 

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