Grain prices were mixed but mostly lower on Monday as traders expressed anxiety over whether last week’s Chinese spy balloon debacle will cool trade moving forward. Soybeans faded 0.75% lower in today’s session. Wheat losses were variable, ranging between 0.1% and 1%. Corn bucked the overall bearish trend after two flash sales announced this morning kept prices barely aloft. Traders await the rapidly approaching World Agriculture Supply and Demand Estimates (WASDE) report, which the agency will deliver on Wednesday morning.
Another round of wet weather is on its way to parts of the Midwest and Plains later this week, with a system stretching from Texas to Michigan expected to delivery another 1” to 2” between Tuesday and Friday, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s new 8-to-14-day outlook predicts more seasonally wet weather for the central U.S. between February 13 and February 19, with warmer-than-normal temperatures likely for the eastern half of the country during this time.
On Wall St., the Dow eased 14 points lower in afternoon trading to 33,911 as investors continue to monitor interest rate trends and await a new batch of corporate earnings reports, out later this week. Energy futures were mixed but mostly higher. Crude oil firmed 1.25% this afternoon to $74 per barrel. Gasoline jumped 2.5% higher, while diesel trended slightly lower. The U.S. Dollar firmed moderately.
On Friday, commodity funds were net buyers of corn (+1,000) and soymeal (+3,000) contracts but were net sellers of soybeans (-2,000), soyoil (-6,000) and CBOT wheat (-2,000).
Corn
Corn prices shook off modest overnight losses to finish slightly higher amid a choppy session after some net technical buying today. March futures picked up 0.5 cents to $6.78, while May futures firmed a penny to reach $6.7650.
Corn basis bids were largely steady across the central U.S. on Monday but did shift 2 cents lower at an Iowa processor today.
Private exporters announced to USDA two large corn sales on Monday. The first was for 4.4 million bushels for delivery to Japan during the 2022/23 marketing year, which began September 1. The second was for 7.9 million bushels to Mexico. Half of that total is for delivery during the current marketing year, with the remainder for delivery in 2023/24.
Corn export inspections trended lower after reaching 18.9 million bushels in the week ending February 2. That was also on the lower end of trade estimates, which ranged between 17.3 million and 31.5 million bushels. Mexico was the No. 1 destination, with 12.1 million bushels. Cumulative totals for the 2022/23 marketing year remain well below last year’s pace so far, with 493.4 million bushels.
Egypt purchased 2.4 million bushels of yellow corn, sourced from Ukraine, in a deal that recently closed, according to a statement from its state grains buyer on Saturday. The grain is for shipment beginning in late February.
Ahead of Wednesday’s WASDE report from USDA, analysts expect the agency to show 2022/23 corn ending stocks shift from 1.242 billion bushels in January to 1.266 billion bushels. Individual trade guesses ranged between 1.200 billion and 1.335 billion bushels.
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Speaking of, farmers who waited for fertilizer prices to drop made a good move, according to grain market analyst Bryce Knorr. “To be sure, crop input costs that reached all-time highs in 2022 are still not back to normal, and prices remain well above average,” he notes. “But for once, more things appear to be going right for farmers than wrong.” Knorr explores the situation in greater detail in today’s Ag Marketing IQ blog – click here to learn more.
Preliminary volume estimates were for 203,066 contracts, which was moderately below Friday’s final count of 239,216.
Soybeans
Soybean prices faced a double-digit drop after worries about Chinese trade relations triggered a round of technical selling on Monday. March futures eroded 11 cents lower to $15.21, with May futures down 11.75 cents to $15.1375.
The rest of the soy complex was mixed. Soymeal futures tumbled 1.5% lower, while soyoil futures picked up modest gains.
Soybean basis bids were mostly steady across the central U.S. on Monday but did tilt 2 cents higher at an Illinois river terminal today.
Soybean export inspections eased slightly lower to 67.2 million bushels last week. That was still on the upper end of analyst estimates, which ranged between 29.4 million and 69.8 million bushels. China was by far the No. 1 destination, with 42.6 million bushels. Cumulative totals for the 2022/23 marketing year have finally pulled ahead of last year’s pace, with 1.393 billion bushels.
Ahead of Wednesday’s WASDE report from USDA, analysts think the agency will slightly raise its estimates for 2022/23 soybean ending stocks from 210 million bushels in January up to 211 million bushels. Individual trade guesses ranged between 176 million and 230 million bushels.
Brazilian consultancy AgRural reported that the country’s 2022/23 soybean harvest is 9% complete through February 2, which is moderately behind last year’s pace of 16%, so far. AgRural is anticipating a record-breaking production this season of 5.618 billion bushels.
Preliminary volume estimates were for 243,144 contracts, moving moderately above Friday’s final count of 184,798.
Wheat prices suffered a moderate technical setback on Monday, with some contracts down nearly 1% today. March Chicago SRW futures fell 7.25 cents to $7.4950, March Kansas City HRW futures eased 0.75 cents to $8.7225, and March MGEX spring wheat futures dropped 6.5 cents to $9.15.
Wheat export inspections were better than expected last week, with 19.7 million bushels. That was above the entire range of trade guesses, which came in between 11.0 million and 19.3 million bushels. The Philippines topped all destinations, with 4.4 million bushels. Cumulative totals for the 2022/23 marketing year are trending slightly below last year’s pace so far, with 505.6 million bushels.
Ahead of Wednesday morning’s WASDE report from USDA, analysts expect the agency to show 2022/23 wheat ending stocks increasing slightly, from 567 million bushels in January up to 576 million bushels. Individual trade guesses ranged between 557 million and 612 million bushels.
South Korea purchased 2.4 million bushels of animal feed wheat in a private deal last Friday sourced from optional origins (including the United States) without issuing an international tender. The grain is for arrival by late August.
Algeria issued an international tender to purchase 1.8 million bushels of soft milling wheat from optional origins that closes on Tuesday. The grain is for shipment starting in March, depending on the source.
Preliminary volume estimates were for 87,989 CBOT contracts, sliding around 33% below Friday’s final count of 132,210.
