Wheat prices reach unprecedented levels

phongphan5922/Thinkstock markets charts - green with red line
Afternoon report: Soybeans also firm in Tuesday’s session, while corn prices slide lower

Grains were mixed but mostly higher on Tuesday, with red-hot wheat prices once again leading the way. Chicago SRW contracts saw the biggest boost, rising 2.5% higher after a round of technical buying largely spurred by tight global stocks and historically low crop quality in the U.S. Soybeans followed suit, firming 1.25% on sluggish planting progress in parts of the upper Midwest and Northern Plains. Corn faced moderate cuts, in contrast, as swift planting progress this past week generated some headwinds.

Between Tuesday and Friday, much of the Midwest and Plains will see at least some measurable moisture. The biggest rainfall totals will likely happen in an area stretching between northern Missouri and northern Minnesota, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts more seasonally wet and cool conditions in parts of the Northern Plains and upper Midwest between May 24 and May 30.

On Wall St., the Dow rose 194 points in afternoon trading to 32,418 after the selloff earlier this month finally attracted some bargain buyers. Year-to-date, the Dow has still incurred total losses of nearly 16%, however. Energy futures spilled into the red today. Crude oil faded nearly 2% lower to $112 per barrel on an uptick of U.S. inventories. Gasoline was also down around 2%, with diesel dropping more than 2.5%. Volatile natural gas prices spiked 4% higher. The U.S. Dollar softened moderately.

On Monday, commodity funds were net buyers of corn (+20,000), soybeans (+5,500), soymeal (+3,000) and CBOT wheat (+20,500) contracts but were net sellers of soyoil (-2,000).

Corn

Corn prices eroded moderately lower on Tuesday after planting progress finally picked up enough to generate some headwinds and prompt a round of technical selling. July futures dropped 7.75 cents to $8.0175, with September futures down 4.75 cents to $7.7325.

Corn basis bids were steady to firm across the central U.S. on Tuesday after rising 8 to 10 cents at two processors and trending 2 to 5 cents higher at two other Midwestern locations today.

Corn plantings reached 49% completion through Sunday, jumping from 22% a week ago and matching analyst expectations. Despite the impressive effort, this year’s pace is still well behind 2021’s mark of 78% and the prior five-year average of 67%. Emergence reached 14%, up from 5% a week ago.

The latest data from the European Commission shows EU corn imports during the 2021/22 marketing year have reached 559.8 million bushels through May 15, which is a year-over-year increase of 6.4% so far.

Preliminary volume estimates were for 203,210 contracts, sliding moderately below Monday’s final count of 283,146.

Soybeans

Soybean prices trended more than 1% higher as traders continue to assess relatively tight domestic and global stocks, along with slow planting progress in some areas. July futures rose 22 cents to $16.7850, with August futures up 17 cents to $16.2425.

Soybean basis bids were mostly steady across the central U.S. on Tuesday but did firm 7 cents at an Iowa river terminal today.

Soybean plantings progressed a bit more quickly than expected last week, moving from 12% a week ago to 30% through Sunday. Analysts had offered an average trade guess of 29% prior to yesterday’s report. This year’s pace is still significantly lower than 58% in 2021 and the prior five-year average of 39%. Soybean emergence was at 9%, up from 3% last week.

European Union soybean imports during the 2021/22 marketing year 456.4 million bushels through May 15, which is a year-over-year decline of 5.8% so far. EU soymeal imports are also trending slightly below last year’s pace, with 14.15 million metric tons during the same period.

Preliminary volume estimates were for 120,275 contracts, trending slightly higher than Monday’s final count of 108,486.

Wheat

Wheat prices shook off overnight losses, raking in more gains today on another round of technical buying as the focus remains on export challenges overseas and quality woes in the U.S. Some contracts firmed as much as 2.5% by the close. July Chicago SRW futures rose 32.25 cents to $12.7975, July Kansas City HRW futures gained 17.25 cents to $13.6925, and July MGEX spring wheat futures added 9.75 cents to $13.9475.

After announcing a ban on future wheat exports, India clarified that it would allow shipments that are already awaiting customs clearance. “What is clear is that more volumes of wheat will come out of the country than what the market expected yesterday but that doesn't seem to change the embargo in itself, which limited the fall in price,” according to one European trader.

Spring wheat plantings improved to 39%, up from 27% a week ago. Analysts missed the mark by four points, with an average trade guess of 43%. Last year’s pace was 83%, and the prior five-year average was 67%.

Winter wheat quality ratings took a turn for the worse. Analysts hoped to see a one-point improvement, but USDA docked the crop another two points, with just 27% now rated in good-to-excellent condition. Another 32% is rated fair (steady from a week ago), with the remaining 41% rated poor or very poor (up two points from last week). Physiologically, 48% of the crop is now headed, which puts it moderately behind 2021’s pace of 51% and the prior five-year average of 53%.

EU soft wheat exports during the 2021/22 marketing year have reached 843.3 million bushels through May 15, which is a year-over-year decline of 3.9% so far. EU barley exports are also down slightly from last year’s pace, with 307.7 million bushels.

Egypt has prior purchases of Ukrainian wheat totaling 11.0 million bushels that were initially for delivery in February and March. However, that grain has not yet been shipped – one cargo is stranded in port and four more haven’t been loaded. Egypt is one of the world’s top wheat importers, and its prime minister said earlier this week that its strategic reserves are currently sufficient for the next four months.

Japan issued a regular tender to purchase 6.4 million bushels of food-quality wheat from the United States, Canada and Australia that closes on Thursday. Of the total, just over a third (34%) is expected to be sourced from the U.S. The grain is for shipment in July.

Bangladesh issued an international tender to purchase 1.8 million bushels of milling wheat from optional origins that closes on May 29. The grain is for shipment 40 days after a contract is signed.

Preliminary volume estimates were for 135,708 CBOT contracts, moving slightly ahead of Monday’s final count of 122,933.

Settlement Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel      
22-Jul 809.25 797.25 800.75 -7.75
22-Sep 777.25 766.75 772.75 -4.75
Soybeans        
22-Jul 1684.25 1645.25 1678 22
22-Sep 1566 1537 1561.75 15.5
Soymeal                $/ton        
22-Aug 413.9 404.3 408.5 -0.9
Soyoil                    cents/lb        
22-Jul 84.19 81.9 83.49 0.42
Wheat                    $/bushel        
22-Jul 1284 1200.75 1277.5 32.25
22-Sep 1285 1203.75 1278.75 29.75
KC Wheat        
22-Jul 1379.25 1298.5 1367.75 17.25
22-Sep 1380 1299.5 1369.25 16
MPLS Wheat        
22-Jul 1412.75 1340 1393.5 9.75
22-Sep 1406.5 1332 1389.5 11.5
Live Cattle             cents/lb        
22-Jun 133.925 132.825 132.85 -0.325
Feeder Cattle         cents/lb        
22-Aug 168.7 166.4 166.525 -0.9
Lean Hogs             cents/lb        
22-Jul 107.975 104.275 107.75 2.95
Crude Oil  $/barrel *Energy prices may not represent final settlements
22-Jun 115.56 112.16 112.37 -1.83
Diesel        
22-Jun 3.9739 3.78 3.794 -0.1135
Unleaded Gasoline   $/gallon        
22-May 4.0524 3.9245 3.9405 -0.0824
Natural Gas        
22-Jul 8.457 8.112 8.383 0.33
U.S. Dollar Index        
22-Jun 104.26 103.25 103.41 -0.79
Gold                      $/ounce        
22-Jun 1834.8 1811.8 1816.7 3.2
Copper        
22-May 4.2795 4.2125 4.2235 0.027
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