Afternoon market recap: Wheat prices finish Friday’s session with narrowly mixed results.
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Some light rain and/or snow will be possible over parts of the Midwest and Plains between Saturday and Tuesday, but very few fields are likely to gather more than 0.25” over the next several days, per the latest 72-hour cumulative precipitation map from NOAA. Later this month, NOAA’s latest 8-to-14-day outlook predicts seasonally cool, wet weather for most of the central U.S. between January 17 and January 23.
On Wall St., the Dow tumbled 558 points lower in afternoon trading to 42,076 on 97% odds that the Federal Reserve will not issue an interest rate cut this month, and with Treasury yields at their highest level in more than a year. Energy futures grabbed sizable gains, with crude oil climbing 3.5% higher this afternoon to $76 on fresh sanctions against Russia. Diesel jumped 5.25% higher, with gasoline up around 2.5%. The U.S. Dollar firmed moderately.
On Thursday, commodity funds were net buyers of corn (+5,500), soybeans (+5,000), soyoil (+5,000) and CBOT wheat (+500) contracts but were net sellers of soymeal (-2,500).
Today’s red-hot performance was mostly fueled by USDA making dramatic cuts to its yield and production estimates. March futures rose 15 cents to $4.71, with May futures up 15.25 cents to $4.7975.
Corn basis bids eased a penny lower at a Nebraska processor while holding steady elsewhere across the central U.S. on Friday.
In today’s WASDE report, USDA slashed corn yields estimates by 3.8 bushels per acre to 179.3 bpa. That put analysts on their heels after offering an average trade guess of 182.7 bpa. That shoves total production estimates back below 15 billion bushels, with a new projection of 14.867 billion bushels.
Regarding demand, total corn use shifted 75 million bushels lower to 15.1 billion. That is due to cuts in feed and residual use (50 million bushels) and exports (25 million bushels). Supply fell more than use, so USDA ultimately lowered corn stocks by 198 million bushels.
Corn exports were lackluster after only reaching 17.5 million bushels last week. Analysts missed the mark after offering trade guesses that ranged between 27.6 million and 59.1 million bushels. Cumulative totals for the 2024/25 marketing year are still tracking moderately ahead of last year’s pace after reaching 654.0 million bushels.
Corn export shipments fared better but were still 21% below the prior four-week average, with 34.0 million bushels. Mexico, Colombia, Japan, South Korea and the Dominican Republic were the top five destinations.
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South Korea purchased 5.3 million bushels of animal feed corn, likely sourced from the United States, South America or South Africa, in an international tender that closed earlier today. The grain is for arrival around May 20.
Corn settlements on Thursday were for 279,051 contracts.
Prices were heavily influenced by USDA’s bullish WASDE data, which included lower-than-expected U.S. yields and production, along with unexpectedly lower global stocks. January futures climbed 21.25 cents to $10.1350, with March futures up 27.5 cents to $10.2650.
The rest of the soy complex was mixed. March soymeal futures slid more than 0.25% lower, while March soyoil futures rocketed almost 7% higher.
Soybean basis bids trended 2 cents higher at an Illinois river terminal while holding steady elsewhere across the central U.S. on Friday.
As with corn, USDA levied unexpected cuts to soybean yield and production estimates in today’s WASDE report. The average yield eroded to 50.7 bpa, versus the average trade guess of 51.6 bpa. Production stumbled from 4.561 billion bushels in December down to 4.366 billion bushels. USDA attributed the downgrades to decreases in several key states, including Indiana, Kansas, South Dakota, Illinois, Iowa and Ohio. Soybean ending stocks slid 90 million bushels lower to 380 million.
Soybean exports eroded 72% below the prior four-week average to 10.6 million bushels, which was a marketing-year low. It was also lower than the entire set of analyst estimates, which ranged between 14.7 million and 51.4 million bushels. Cumulative totals for the 2024/25 marketing year are still tracking moderately above last year’s pace so far after reaching 1.101 billion bushels.
Soybean export shipments eased 7% below the prior week’s volume, with 58.1 million bushels. China, the Netherlands, Indonesia, Vietnam and Germany were the top five destinations.
Two Brazilian consultancies offered fairly contrasting opinions on the country’s 2024/25 soybean production. Safras & Mercado served up a more bullish estimate of 6.383 billion bushels, while Patria AgroNegocios has a more tempered position of 6.171 billion bushels. Either estimate would be a record-breaking volume, if realized. The two consultancies have been watching dry patterns in some production regions versus heavy rains in others.
Soybean settlements on Thursday were for 134,132 contracts.
Prices tested gains following some spillover support from corn and soybeans late Friday morning but were mostly unable to hold onto them by the time today’s session drew to a close. March Chicago SRW futures dropped 4.25 cents to $5.2975, March Kansas City HRW futures inched 0.75 cents higher to $5.51, and March MGEX spring wheat futures eased 0.75 cents to $5.8275.
USDA’s new outlook for wheat noted “slightly larger supplies and domestic use, unchanged exports, and marginally higher ending stocks.” Supplies shifted 5 million bushels higher to 130 million on some hard red spring imports. Exports held steady at 850 million bushels, but USDA did note some minor offsetting by-class changes. All told, 2024/25 ending stocks moved 3 million bushels higher to 798 million, which is a 15% year-over-year increase.
USDA also offered a look at U.S. winter wheat plantings, which the agency pegs at 34.115 million acres. That was above the average trade estimate of 33.366 million acres and exceeds 2024 plantings by 725,000 acres.
Wheat exports were disappointing after only reaching 4.2 million bushels last week. That was also below the entire set of analyst estimates, which ranged between 5.5 million and 20.2 million bushels. Cumulative totals for the 2024/25 marketing year are still trending moderately ahead of last year’s pace, with 454.2 million bushels.
Wheat export shipments improved 22% above the prior four-week average, reaching 15.2 million bushels. Mexico, South Korea, Nigeria, the Philippines and Indonesia were the top five destinations.
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CBOT wheat settlements on Thursday were for 75,131 contracts.
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