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Afternoon report: Soybeans lightly mixed on Wednesday, while wheat slumps lower.
May 24, 2023
Grain prices were mixed again on Wednesday as traders keep close tabs on weather trends and await the next round of export data from USDA first thing Thursday morning. Corn prices continued to trend higher, with nearby contracts grabbing 1.75% gains. Soybean prices were narrowly mixed. Wheat prices suffered a severe technical setback, with most contracts losing between 2.25% and 3.5%.
The Plains should catch some additional rains between Thursday and Sunday, but not much of the Corn Belt will find any measurable moisture for the rest of this week, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s new 8-to-14-day outlook predicts seasonally dry weather building across the upper Midwest and Great Lakes region between May 31 and June 6. Most of the central U.S. will also be warmer than normal during this time.On Wall St., the Dow faded 276 points lower in afternoon trading to 32,779 amid ongoing debt ceiling negotiations, which need to be resolved in the next week or so to avoid debt default – an event that would trigger an almost-immediate recession and put millions of jobs in jeopardy. Energy futures all posted solid gains today. Crude oil rose 2% this afternoon to $74 per barrels. Gasoline and diesel each firmed around 2.25%. The U.S. Dollar firmed moderately.
On Tuesday, commodity funds were net buyers of corn (+4,500) and CBOT wheat (+5,500) contracts but were net sellers of soybeans (-6,000), soymeal (-2,500) and soyoil (-3,000).
Corn prices benefited from a round of technical buying on Friday that gave nearby July futures a big bounce while September futures had to settle for most modest gains. July futures rose 10.25 cents to $5.8775, with September futures up 2 cents to $5.14.
Corn basis bids were steady to mixed across the central U.S. on Wednesday after moving as much as 10 cents higher at an Iowa river terminal and as much as 5 cents lower ta a Nebraska processor today.
Ethanol production eased slightly in the week ending May 19, with a daily average of 983,000 barrels, per the latest data from the U.S. Energy Information Administration, out Wednesday morning. It also marked the fifth consecutive week that production failed to meet the 1-million-barrel-per-day benchmark. Ethanol stocks shifted 5% lower last week.
Prior to Thursday morning’s export report from USDA, analysts expect the agency to show corn sales ranging between net reductions of 19.7 million bushels and net sales of 27.6 million bushels for the week ending May 18.
Brazilian consultancy Agroconsult raised its estimates for the country’s second corn crop production for the 2022/23 season, with a new tally of 4.031 billion bushels. Brazil’s safrinha crop accounts for around 75% of the country’s total corn production.
David Kohl has forged a career in interpreting economic change – in particular, he studies the indicators that can foretell the direction of the economy. As more and more experts worry about a possible recession later this year, Kohl rolls up his sleeves and takes a fresh look at what’s happening right now in his latest column – click here to learn more.
Grain traveling the nation’s railways totaled another 17,807 carloads. That brings 2023’s total up to 402,566 carloads, which is 7.1% below last year’s pace so far.
Taiwan purchased 2.6 million bushels of animal feed corn, likely sourced from Brazil, in an international tender that closed earlier today. The grain is for shipment in August.
Preliminary volume estimates were for 339,479 contracts, trending moderately higher than Tuesday’s final count of 267,064.
Soybean prices were narrowly mixed following an uneven round of technical maneuvering on Wednesday, a signal that traders are probably waiting for fresh export data tomorrow morning before making any serious moves. July futures picked up 1.75 cents to $13.2425, while August futures faded 0.75 cents lower to $12.58.
The rest of the soy complex was also mixed today. Soymeal futures lost 1%, while soyoil futures trended nearly 0.5% higher.
Soybean basis bids held steady across the central U.S. again on Wednesday.
Ahead of tomorrow morning’s export report from USDA, analysts think the agency will show soybean sales ranging between 1.8 million and 35.8 million bushels for the week ending May 18. Analysts also expect to see soymeal sales ranging between 150,000 and 550,000 metric tons last week, plus up to 20,000 MT of soyoil sales.
Do you think you can outguess a weather market? That may be an impossible task, according to Brian Basting, commodity research analyst with Advance Trading. “There are simply too many unknowns,” he argues. However, there are three “time-honored principles” that tend to accompany weather markets. Basting maps out the situation in yesterday’s Ag Marketing IQ blog – click here to learn more.
Farmers sharing their progress with Feedback From The Field indicated that spring plantings are quickly wrapping up. Weather has been widely variable. For instance, pivots are already running in eastern Nebraska, while a Iowa soybean farmer got delayed from a five-inch rain event last week. Click here to read the latest round of farmer anecdotes and view our interactive maps.
Preliminary volume estimates were for 178,081 contracts, sliding slightly below Tuesday’s final tally of 199,263.
Wheat prices were slashed after a round of technical selling, letting some traders lock in profits captured on Tuesday. Worries about competitiveness of U.S. grain in some key overseas markets continues to keep bearish sentiment in high supply. September Chicago SRW futures dropped 17 cents to $6.1750, September Kansas City HRW futures lost 26.75 cents to $8.07, and September MGEX spring wheat futures fell 19.25 cents to $8.05.
Prior to Thursday morning’s export report from USDA, analysts expect the agency to show wheat sales ranging between 4.6 million and 22.0 million bushels in the week through May 18.
China’s wheat imports during the first four months of the year have climbed 61% above last year’s pace to around 220 million bushels as the country has shifted somewhat away from its typical corn and soybean imports. In fact, China has cancelled a significant volume of U.S. corn sales in recent weeks. “Once wheat is used up, soymeal demand will come back a bit. But it feels like wheat supply is quite ample, we may be using it for several more months,” according to one soymeal purchaser who requested to remain anonymous.
Preliminary volume estimates were for 94,769 CBOT contracts, which was slightly higher than Tuesday’s final count of 85,777.
Senior editor, Farm Futures
Senior Editor Ben Potter brings two decades of professional agricultural communications and journalism experience to Farm Futures. He began working in the industry in the highly specific world of southern row crop production. Since that time, he has expanded his knowledge to cover a broad range of topics relevant to agriculture, including agronomy, machinery, technology, business, marketing, politics and weather. He has won several writing awards from the American Agricultural Editors Association, most recently on two features about drones and farmers who operate distilleries as a side business. Ben is a graduate of the University of Missouri School of Journalism.
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