A broad set of stocks and commodities jumped higher after strong U.S. economic data and better-than-expected export data triggered an ample round of technical buying on Thursday. Corn prices tracked 1% higher, while soybeans climbed nearly 1.5% higher. Wheat gains were variable, ranging between 0.5% and 2.25% today.
Plenty more rainy weather is on its way to the Mid-South between Friday and Monday, with additional rain and/or snow likely for most of the Midwest and Plains during this time, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s new 8-to-14-day outlook predicts seasonally cool, wet conditions for much of the central U.S. between February 2 and February 8.
On Wall St., the Dow firmed 125 points higher to 33,869 in afternoon trading on the heels of a better-than-expected GDP report (+2.9% in Q4 2022). Energy futures also moved higher, with crude oil up 1% this afternoon to $81 per barrel. Diesel also trended 1% higher, with gasoline up around 0.75%. The U.S. Dollar firmed moderately.
On Wednesday, commodity funds were net buyers of soybeans (+5,000), soymeal (+3,000) and CBOT wheat (+3,500) but were net sellers of corn (-4,000) and soyoil (-1,500).
Corn
Corn prices rose 1% higher on Thursday, primarily due to spillover support from other commodities, and as a Ukrainian trade association has set low expectations for the country’s 2023 production potential. March futures firmed 7 cents to $6.8175, with May futures up 5.75 cents to $6.79.
Corn basis bids were mostly steady across the central U.S. on Thursday but did trend 5 cents higher at a Nebraska processor today.
Corn exports saw 36.5 million bushels in totals sales for the week ending January 19. Old crop sales were down 20% week-over-week but still 46% above the prior four-week average. That was toward the lower end of trade estimates, which ranged between 23.6 million and 59.1 million bushels. Cumulative totals for the 2022/23 marketing year are also well below last year’s pace, with 472.9 million bushels.
Corn export shipments improved 27% above the prior four-week average, with 35.9 million bushels. Mexico, Japan, Guatemala, Saudi Arabia and China were the top five destinations.
The Ukraine Grain Association estimates that the country’s 2023 corn production will only reach 708.6 million bushels, due to difficulties amid the Russian invasion along with possible weather disruptions and farm financial difficulties. UGA also estimates that the country’s 2023 wheat production will reach 587.9 million bushels. Ukraine is a significant exporter of both commodities.
Preliminary volume estimates were for 261,153 contracts, moving around 18% above Wednesday’s final count of 222,255.
Soybeans
Soybean prices rose steadily throughout Thursday’s session after a robust round of export data from USDA this morning, along with an additional flash sale to China, sparked plenty of technical buying. March futures rose 21 cents to $15.2350, with May futures up 18.75 cents to $15.1525.
Soybean basis bids remained steady across the central U.S. on Thursday.
Private exporters announced the sale of 3.9 million bushels of soybeans for delivery to China during the 2023/24 marketing year, which begins September 1.
Soybean exports reached 46.8 million bushels in total old and new crop sales last week. Old crop sales climbed 53% above the prior four-week average. Total sales were also above the entire range of trade guesses, which came in between 22.0 million and 46.3 million bushels. Cumulative sales for the 2022/23 marketing year remain slightly behind last year’s pace for now, with 1.236 billion bushels.
Soybean export shipments trended 11% above the prior four-week average, with 69.8 million bushels. China, Mexico, Germany, the Netherlands and Taiwan were the top five destinations.
Other commodities – and crude oil in particular – can have a significant impact on grain prices. Naomi Blohm, senior market adviser with Stewart Peterson, is bullish on where oil prices are headed later this year. “Time will tell, but I have to tell you, my overall bias is leaning toward higher crude oil prices by summer, likely testing that $100 per barrel technical target,” she asserts. Blohm walks through five fundamental factors she is currently monitoring in today’s Ag Marketing IQ blog – click here to learn more.
Preliminary volume estimates were for 211,848 contracts, shifting slightly above Wednesday’s final count of 190,144.
Wheat
Wheat prices firmed on lingering concerns about Ukrainian production along with bullish global demand trends. Spillover strength from other commodities lent additional support today. March Chicago SRW futures rose 11 cents to $7.5225, March Kansas City HRW futures climbed 20 cents to $8.6325, and March MGEX spring wheat futures added 4 cents to $9.1350.
Wheat exports landed 20.6 million bushels in old and new crop sales last week. Old crop sales climbed 84% above the prior four-week average. That was also toward the high end of trade estimates, which ranged between 5.5 million and 21.1 million bushels. Cumulative totals for the 2022/23 marketing year are still slightly below last year’s pace, with 419.9 million bushels.
Wheat export shipments shifted 15% above the prior four-week average, with 9.7 million bushels. South Korea, Japan, Chile, Mexico and Colombia were the top five destinations.
South Korea purchased a little over 400,000 bushels of animal feed wheat, likely sourced from the United States, in a private deal that closed earlier today. The grain is for arrival in April.
What do you want your operation to look like in the future? “Considering the answers can help you make plans now for what you need to prioritize in this calendar year and in a longer-term plan for your operation,” according to Darren Frye, CEO of Water Street Solutions. Frye explores the situation in greater depth in his latest Finance First column – click here to learn more.
Preliminary volume estimates were for 79,992 CBOT contracts, moving slightly ahead of Wednesday’s final count of 72,593.
