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Wheat prices rise another 2%

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Afternoon report: Corn prices also firm in Monday’s session, while soybeans sputter.

Grain prices were mixed but mostly higher to start the week. Winter wheat prices saw the most upside, snapping a three-day losing streak on a round of bargain buying as traders continue to monitor dismal crop quality in the U.S. and disruptions to fieldwork and exports in Ukraine. Corn prices also trended moderately higher today, while soybeans suffered a moderate setback on a round of technical selling that pushed prices nearly 1% lower.

Massive amounts of rain is possible later this week for an area stretching from Kansas down to Texas and through the Mid-South. Some fields could see 4” to 5” or more between Tuesday and Friday, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts more seasonally wet weather for the Corn Belt between May 30 and June 5, with warmer-than-normal conditions likely for the eastern half of the country during that time.

On Wall St., the Dow took a solid first step at ending an eight-week losing streak by rising 651 points in afternoon trading to 31,913. Banking and retail stocks led the charge today. Energy futures were mixed. Crude oil trended slightly higher, staying just above $110 per barrel. Diesel moved 0.5% higher, while gasoline dropped 0.75%. Volatile natural gas prices spiked nearly 8% higher. The U.S. Dollar softened significantly.

On Friday, commodity funds were net buyers of soybeans (+4,000), soymeal (+2,000) and soyoil (+3,500) contracts but were net sellers of corn (-5,500) and CBOT wheat (-10,500).

Corn

Corn prices found some positive forward momentum on a round of technical buying largely spurred by a better-than-expected round of export inspection data from USDA, with spillover strength from wheat applying additional tailwinds today. July and September futures each firmed 7.25 cents to close at $7.86 and $7.5425, respectively.

Corn basis bids were steady to mixed on Monday after dropping 5 cents at an Indiana ethanol plant and firming 2 cents at two other Midwestern locations today.

Corn export inspections climbed to 66.9 million bushels last week. That was better than the entire range of trade guesses, which came in between 23.6 million and 59.1 million bushels. China was the No. 1 destination, with 31.2 million bushels. Cumulative totals for the 2021/22 marketing year remain moderately below last year’s pace, however, with 1.608 billion bushels.

Ahead of the next USDA crop progress report, out later this afternoon and covering the week through May 22, analysts expect the agency to show corn plantings move from 49% a week ago to 68% through Sunday. Individual trade guesses ranged between 63% and 74%.

Bracing for the ill effects of domestic shortfalls, Kenya has authorized duty-free imports of up to 21.3 million bushels of corn between now and August. Faced with drought and other production challenges, approximately 3.5 million Kenyan citizens are currently in need of food aid.

Curious to learn more about how Russia’s ongoing invasion of Ukraine is affecting global food and fuel prices and availability? Farm Futures Jacqueline Holland has penned an extensive five-part analysis tackling many of the nuances happening right now. Part one of “Black swan in the Black Sea” was released today – click here to learn more.

Preliminary volume estimates were for 168,645 contracts, moving slightly above Friday’s final count of 164,515.

Soybeans

Soybean prices found new four-week highs in overnight trading but reversed back into the red as Monday’s session progressed, closing with moderate losses after a round of technical selling today. July futures dropped 18 cents to $16.8725, with August futures down 13 cents to $16.2875.

Soybean basis bids were steady to mixed to start the week after dropping 8 to 10 cents at two Midwestern processors while firming 8 to 10 cents higher at three other locations today.

Private exporters announced the sale of 4.8 million bushels of soybeans for delivery to Egypt during the 2021/22 marketing year, which began September 1.

Soybean export inspections tilted moderately below the prior week’s tally, with 21.2 million bushels. It was also a bit on the lower end of trade estimates, which ranged between 14.7 million and 33.1 million bushels. China topped all destinations, with 6.0 million bushels. Cumulative totals for the 2021/22 marketing year are still well behind last year’s pace, with 1.804 billion bushels.

Ahead of this afternoon’s crop progress report from USDA, analysts think the agency will show soybean plantings at 49% through May 22, up from 30% a week earlier. Individual trade guesses ranged between 43% and 55%.

Preliminary volume estimates were for 162,068 contracts, which was slightly higher than Friday’s final count of 157,439.

Wheat

Wheat prices finally found some positive forward momentum after slumping lower in the past three sessions. Bargain buyers turned up on Monday, pushing some contracts more than 2% higher by the close. July Chicago SRW futures rose 24.5 cents to $11.9325, July Kansas City HRW futures climbed 24.75 cents to $12.7750, and July MGEX spring wheat futures gained 21 cents to $13.00.

Wheat export inspections shifted 11% below the prior week’s pace to 11.4 million bushels. That was good enough to come close to the middle of trade estimates, which ranged between 5.5 million and 18.4 million bushels. Japan was the No. 1 destination, with 4.0 million bushels. Cumulative totals for the 2021/22 marketing year are still moderately behind last year’s pace after moving to 723.3 million bushels.

Prior to this afternoon’s crop progress report from USDA, analysts estimate that spring wheat plantings moved from 39% a week ago up to 56% through Sunday. For winter wheat, analysts expect to see a one-point quality improvement, with 28% of the crop rated in good-to-excellent condition through May 22.

European Union crop monitor MARS has slightly lowered its estimates for 2022 EU soft wheat yields, which is now at 87.6 bushels per acre. That’s 2.5% lower than a year ago but still 0.9% above the prior five-year average. “Our yield forecasts for winter crops were revised slightly downwards at EU level, but remain above the five-year average. Substantial rainfall in the coming weeks will be necessary to sustain the yield potential,” according to the report.

Russian consultancy Sovecon estimates that the country’s May wheat exports will only reach 29.4 million bushels. That would be a 64% drop from April’s tally, if realized, but it would also be moderately above last May’s tally. Russia is the world’s No. 1 wheat exporter and is anticipating a record crop this season.

Preliminary volume estimates were for 63,088 CBOT contracts, easing slightly below Friday’s final count of 68,128.

Settlement Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel      
22-Jul 788 774.5 786.25 7.25
22-Sep 756.25 743.5 754.75 7.25
Soybeans        
22-Jul 1720 1685 1687 -18
22-Sep 1578.75 1554.5 1558.5 -9.75
Soymeal                $/ton        
22-Aug 427 416.2 418.1 -5.9
Soyoil                    cents/lb        
22-Jul 79.07 77.3 77.96 -0.05
Wheat                    $/bushel        
22-Jul 1196.75 1174.75 1190 24.5
22-Sep 1202.5 1180.75 1197.5 26.5
KC Wheat        
22-Jul 1282.25 1259 1276.5 24.75
22-Sep 1285.5 1263.25 1280.5 25
MPLS Wheat        
22-Jul 1305 1279.5 1298.5 21
22-Sep 1305 1279.25 1297.5 21.25
Live Cattle             cents/lb        
22-Jun 132.975 131.2 132.975 1.4
Feeder Cattle         cents/lb        
22-Aug 165.95 162.8 165.65 1.725
Lean Hogs             cents/lb        
22-Jul 111.125 108.775 110.85 1.85
Crude Oil  $/barrel *Energy prices may not represent final settlements
22-Jun 111.96 109.15 110.23 -0.05
Diesel        
22-Jun 3.7917 3.6972 3.7862 0.0471
Unleaded Gasoline   $/gallon        
22-May 3.8638 3.7806 3.7891 -0.0479
Natural Gas        
22-Jul 8.884 7.95 8.842 0.664
U.S. Dollar Index        
22-Jun 103.07 102.045 102.105 -1.068
Gold                      $/ounce        
22-Jun 1864.3 1843.3 1856.6 14.8
Copper        
22-May 4.3485 4.29 4.3225 0.0415
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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