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Soy rally continues overnight

morning market recap.jpg
Morning report: Corn sees a boost from bargain buying while wheat is mixed. (Comments are updated by 7:30 a.m. Central Time.)

*Prices as of 6:50 am CST.

Good morning! Our team at Farm Futures has recently launched our annual December farmer survey! The data from this survey is used to predict 2022 production ahead of the January 2023 WASDE report and also provides the first look at 2023 acreage, which will be announced at our Farm Futures Business Summit in mid-January 2023.

Are you a farmer who wants to participate? Click this link to take our survey. We will share the results with you through our platforms after the new year begins!

Corn

Corn prices rose $0.01-$0.04/bushel this morning to $6.33-$6.45/bushel following a very slow overnight trading session that followed yesterday’s losses. A weaker dollar helped fuel export prospects and low prices encouraged international players to buy back into the market overnight.

"Wheat and corn are seeing some bargain-buying support today, with their value looking underpriced after strong falls on Monday, but with continued bearish background factors,” Matt Ammermann, StoneX commodity risk manager, told Reuters this morning.

Low corn prices triggered a flurry of international corn tenders overnight. South Korea’s Feed Leaders Committee (FLC) is believed to have purchased 2.6 million bushels of corn for livestock feed for $8.36/bushel C&F with extra unloading fees added. Traders expect that the FLC will likely source these corn supplies from Brazil or Argentina.

Also overnight, Taiwan buyers issued a 2.6-million-bushel tender for animal feed-grade corn. While price offers have not yet submitted, the Taiwanese MFIG buying group is likely to allow sourcing from the U.S., Brazil, Argentina, or South Africa.

Soybeans

USDA announced a large daily soybean export sale to China yesterday which compounded with easing Chinese COVID-19 restrictions to fuel a $0.05-$0.18/bushel rally in the soybean market this morning. But the rallies were capped by lingering uncertainty about global commodity demand as the worldwide economy remains wary of a looming recession.

"Soybeans are seeing support from hopes that China's relaxation of anti-COVID measures could generate higher economic activity and so greater soybean imports," Ammermann said. "But this is currently hope, rather than evidence, of actual new soybean demand."

"There is weather concern about South American crops, including in Brazil and Argentina, but both soybeans and corn from South America are still looking cheap in export markets."

Brazilian agribusiness consultancy AgRural projecting Brazilian soybean planting for the 2022/23 growing season to be 91% complete as of yesterday, down 3% from year ago sowing paces. Temperatures are heating up across Brazil this week, which could extend bullish sentiments in the global soybean markets.”

Top producing region Mato Grosso has experienced spotty rains over the past week. Any dryness is likely to have a negative impact on early planted crops. Rainfall in December is a key factor for ensuring healthy yields for Brazilian soybean plants.

While some northeastern regions in Brazil are grappling with excess rainfall, last year’s drought-plagued Rio Grande do Sul state in the south has not seen the regular rainfall needed to eliminate drought worries for this year’s growing season.

While it is too early to worry about soybean yields in that part of Brazil (which follows Mato Grosso as Brazil’s second largest soy-producing region), growers are already beginning to express concern about the health of first crop corn in the South.

About 25% of Brazil’s corn is grown in the first crop. About 93% of Brazil’s 2022/23 first corn crop has been planted, down just 1% from a year ago.

Wheat

Forecasts for a record-setting Australian wheat crop announced on the newswires yesterday sent Kansas City and Minneapolis wheat futures lower this morning. But a weaker dollar help prop up slight gains in the Chicago wheat market. Russia behemoth crop continues to weigh on global export prospects.

"Although Chicago wheat hit a 13-month low on Monday, Russian wheat is still being offered at even lower prices than the U.S. in global markets," Ammermann told Reuters. "There is demand in the market but Russian wheat seems to keep winning the main export business. A large Australian crop is also looming."

Weather

Light snow showers will continue to scatter across the Upper Midwest today, according to NOAA’s short-term forecasts. The more significant weather disruptor today is likely to be a band of rain showers that will linger over the Eastern Corn Belt and Southeast.

Up to an inch of accumulation is expected as the system moves through Kentucky and Tennessee, though volumes are likely to dip as the system edges along the Eastern Corn Belt over the next 24 hours.

NOAA’s 6-10-day forecasts are trending cooler than usual for the portion of the continental U.S. west of the Rocky Mountains through early next week. During that time, the Plains and Midwest will likely see warmer than average temperatures. Luckily, the precipitation forecasts are calling for above average chances for precipitation across virtually all of the major growing (and skiing!) regions in the U.S.

The temperature trends in the 8-10-day outlook will cool across most of the Heartland (except the Eastern Corn Belt) by later next week. Chances for moisture are likely to remain above normal for most of the Midwest and Plains during that time, though the Southern Plains are likely to see a below average chance of precipitation.

Financials

S&P 500 futures attempted a 0.17% gain this morning to $4,010.00 following yesterday’s steep losses on Wall Street. Energy prices continued lower amid global recession and interest rate hike concerns, which overshadowed optimism about China’s easing COVID-19 restrictions.

World Cup: Congratulations to Brazil on their win yesterday! And my apologies about insinuating Argentina lost in yesterday’s newsletter. They didn’t – Lionel Messi and crew are still in it. Minus the U.S. men losing, I lost track of World Cup play over the weekend. But I am back on top of it today and am looking forward to the Portugal and Switzerland matchup. Looks like a great day for a long lunch!

What else I’m reading this morning on our website, FarmFutures.com:

Morning Ag Commodity Prices - 12/6/2022
Contract Units High Low Last Net Change % Change
DEC '22 CORN $ / BSH  6.33 6.3075 6.33 0.0425 0.68%
MAR '23 CORN $ / BSH  6.4425 6.405 6.425 0.02 0.31%
MAY '23 CORN $ / BSH  6.46 6.425 6.4425 0.02 0.31%
JUL '23 CORN $ / BSH  6.43 6.4 6.4075 0.0125 0.20%
SEP '23 CORN $ / BSH  6.095 6.06 6.075 0.015 0.25%
DEC '23 CORN $ / BSH  5.9825 5.955 5.9625 0.01 0.17%
AR2 '24 CORN $ / BSH  6.05 6.0275 6.0475 0.0175 0.29%
AY2 '24 CORN $ / BSH  6.0875 #N/A 6.0625 0 0.00%
JUL '24 CORN $ / BSH  6.065 6.065 6.065 0.015 0.25%
JAN '23 SOYBEANS $ / BSH  14.54 14.37 14.53 0.1525 1.06%
MAR '23 SOYBEANS $ / BSH  14.6075 14.445 14.5975 0.1475 1.02%
MAY '23 SOYBEANS $ / BSH  14.68 14.525 14.67 0.14 0.96%
JUL '23 SOYBEANS $ / BSH  14.7225 14.57 14.7125 0.135 0.93%
AUG '23 SOYBEANS $ / BSH  14.5475 14.445 14.535 0.1275 0.88%
SEP '23 SOYBEANS $ / BSH  14.1075 13.985 14.1 0.1125 0.80%
NOV '23 SOYBEANS $ / BSH  13.8775 13.7575 13.86 0.0925 0.67%
AN2 '24 SOYBEANS $ / BSH  13.88 13.8 13.875 0.0725 0.53%
AR2 '24 SOYBEANS $ / BSH  13.805 13.805 13.805 0.0525 0.38%
AY2 '24 SOYBEANS $ / BSH  13.8275 #N/A 13.735 0 0.00%
UL2 '24 SOYBEANS $ / BSH  13.85 #N/A 13.7525 0 0.00%
DEC '22 SOYBEAN OIL  $ / LB 65.11 64.93 64.93 0.03 0.05%
JAN '23 SOYBEAN OIL  $ / LB 63.5 62.59 63.1 0.53 0.85%
DEC '22 SOY MEAL $ / TON 420 #N/A 432 0 0.00%
JAN '23 SOY MEAL $ / TON 438 432.1 437.2 5.1 1.18%
MAR '23 SOY MEAL $ / TON 435.7 430.5 435.3 4.8 1.11%
MAY '23 SOY MEAL $ / TON 432.8 428.6 432.5 4.1 0.96%
JUL '23 SOY MEAL $ / TON 430.5 427 430.3 3.3 0.77%
DEC '22 Chicago SRW $ / BSH  7.1575 7.1575 7.1575 0.0025 0.03%
MAR '23 Chicago SRW $ / BSH  7.43 7.37 7.3825 -0.0075 -0.10%
MAY '23 Chicago SRW $ / BSH  7.5425 7.49 7.5 -0.0075 -0.10%
JUL '23 Chicago SRW $ / BSH  7.61 7.5575 7.5725 0.0025 0.03%
SEP '23 Chicago SRW $ / BSH  7.705 7.6525 7.6725 0.01 0.13%
DEC '23 Chicago SRW $ / BSH  7.835 7.775 7.805 0.025 0.32%
AR2 '24 Chicago SRW $ / BSH  7.905 7.8375 7.905 0.0625 0.80%
DEC '22 Kansas City HRW $ / BSH  8.5075 8.44 8.44 -0.1075 -1.26%
MAR '23 Kansas City HRW $ / BSH  8.4525 8.3675 8.3725 -0.045 -0.53%
MAY '23 Kansas City HRW $ / BSH  8.4225 8.3375 8.3375 -0.0475 -0.57%
JUL '23 Kansas City HRW $ / BSH  8.375 8.295 8.295 -0.0425 -0.51%
SEP '23 Kansas City HRW $ / BSH  8.38 8.3225 8.3225 -0.0375 -0.45%
DEC '23 Kansas City HRW $ / BSH  8.3925 8.37 8.37 -0.04 -0.48%
AR2 '24 Kansas City HRW $ / BSH  0 #N/A 8.39 0 0.00%
DEC '22 MLPS Spring Wheat $ / BSH  0 #N/A 9.1275 0 0.00%
MAR '23 MLPS Spring Wheat $ / BSH  9.0425 9.01 9.0275 0.0075 0.08%
MAY '23 MLPS Spring Wheat $ / BSH  9.0425 9.0125 9.02 0.0025 0.03%
JUL '23 MLPS Spring Wheat $ / BSH  9.0325 9 9 -0.0075 -0.08%
SEP '23 MLPS Spring Wheat $ / BSH  8.92 8.9 8.9 -0.01 -0.11%
DEC '23 MLPS Spring Wheat $ / BSH  8.935 8.935 8.935 -0.02 -0.22%
AR2 '24 MLPS Spring Wheat $ / BSH  0 #N/A 8.9325 0 0.00%
DEC '21 ICE Dollar Index $ 105.46 104.85 104.85 -0.389 -0.37%
 JA '21 Light Crude $ / BBL  77.88 75.58 75.93 -1 -1.30%
 FE '21 Light Crude $ / BBL  78.05 75.77 76.12 -0.96 -1.25%
JAN '23 ULS Diesel $ /U GAL 3.03 2.9476 2.9685 -0.0313 -1.04%
FEB '23 ULS Diesel $ /U GAL 2.9985 2.925 2.9471 -0.0231 -0.78%
JAN '23 Gasoline $ /U GAL 2.2332 2.1756 2.1829 -0.019 -0.86%
FEB '23 Gasoline $ /U GAL 2.2428 2.1865 2.1917 -0.0205 -0.93%
JAN '23 Feeder Cattle $ / CWT 0 #N/A 183.775 0 0.00%
MAR '23 Feeder Cattle $ / CWT 0 #N/A 186.375 0 0.00%
 DE '21 Live Cattle $ / CWT 0 #N/A 153.225 0 0.00%
 FE '21 Live Cattle $ / CWT 0 #N/A 155.825 0 0.00%
DEC '22 Live Hogs $ / CWT 0 #N/A 82.075 0 0.00%
FEB '23 Live Hogs $ / CWT 0 #N/A 90.525 0 0.00%
DEC '22 Class III Milk $ / CWT 20.45 20.4 20.45 0.04 0.20%
JAN '23 Class III Milk $ / CWT 19.35 #N/A 19.99 0 0.00%
FEB '23 Class III Milk $ / CWT 19.67 #N/A 19.72 0 0.00%

 


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