Grain prices were mixed but mostly higher on Wednesday. Soybeans grabbed double-digit gains, thanks to some fresh export optimism that triggered some short covering today. Wheat gains were variable, mostly ranging between 0.5% and 1%. Corn prices fought through a choppy session to close modestly lower.
More light rain and/or snow will fall on a large percentage of the central U.S. between Thursday and Sunday, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook calls for more seasonally wet weather for parts of the Midwest and Plains between February 1 and February 7, with much colder weather in store for nearly all of the United States during that time.
On Wall St., the Dow eased 61 points to 33,672 as investors look more closely at how rising interest rates are affecting corporate earning potential. Energy futures were mixed. Crude oil moved modestly higher this afternoon, staying just above $80 per barrel. Diesel dropped 1.75%, meantime, with gasoline down more than 2%. The U.S. Dollar softened moderately.
On Tuesday, commodity funds were net buyers of corn (+8,000) and CBOT wheat (+6,000) contracts but were net sellers of soybeans (-1,000), soymeal (-2,000) and soyoil (-2,000).
Corn
Corn prices tested modest gains at times in Wednesday’s session but ultimately closed with small losses after some net technical selling today. March futures eased 3 cents lower to $6.74, with May futures down 2.5 cents to $6.7275.
Corn basis bids were mostly steady across the central U.S. on Wednesday but did move as much as 5 cents higher at a Nebraska processor and as much as 3 cents lower at an Illinois river terminal today.
Private exporters announced to USDA the sale of 3.9 million bushels of corn for delivery to unknown destinations during the 2022/23 marketing year, which began September 1.
Ethanol production improved slightly for the week ending January 20, with a daily average of 1.012 million barrels, per the latest data from the U.S. Energy Information Administration, out earlier today. Stocks jumped 7% higher last week.
Ahead of Thursday morning’s export report from USDA, analysts expect the agency to show corn sales ranging between 23.6 million and 59.1 million bushels for the week ending January 19.
Using vegetative density imagery and other data, Refinitiv Commodities Research lowered its 2022/23 Argentina corn production estimates by 6% to 1.783 billion bushels. Recent wet weather could prove beneficial, although Refinitiv also noted “there is a chance that some torrential downpours will take place in the northern half of the Pampas sometime early next week.”
What does luck have to do with grain marketing? “Luck is where hard work meets opportunity,” according to Brady Huck, risk advisor with Advance Trading. “The recent bull market has made marketing feel relatively easy. I’m afraid it has caused many to forget how fleeting and unforgiving marketing your crops can be.” Huck serves up a fresh round of analysis in yesterday’s Ag Marketing IQ blog – click here to learn more.
Preliminary volume estimates were for 222,255 contracts, which is moderately below Tuesday’s final count of 279,706.
Soybeans
Soybean prices found double-digit gains after a flash sale announced by USDA this morning led to some technical buying and short covering. Nearby contracts finished with gains of around 1%. March futures rose 15 cents to $15.0350, with May futures up 10.75 cents to $14.9725.
Soybean basis bids were mostly steady across the central U.S. on Wednesday but did inch a penny higher at an Illinois river terminal today.
Private exporters announced to USDA the sale of 4.8 million bushels of soybeans for delivery during the 2022/23 marketing year, which began September 1.
Prior to tomorrow morning’s export report from USDA, analysts think the agency will show soybean sales ranging between 22.0 million and 46.3 million bushels for the week ending January 19. Analysts also expect to see soymeal sales ranging between 150,000 and 400,000 metric tons, plus up to 10,000 MT of soyoil sales.
Has the soybean pendulum swung from bullish to bearish? That’s a question that Jim McCormick, hedging strategist with AgMarket.net, found himself asking in today’s Ag Marketing IQ blog. “If OilWorld’s South American production forecast estimates come to fruition, total South American production would be down 13.5 MMT from USDA's current number. Yet, global production would still be a record at 374.5 MMT,” he notes, among other things. Click here to learn more.
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Preliminary volume estimates were for 190,144 contracts, sliding slightly below Tuesday’s final tally of 209,672.
Wheat
Wheat prices trended moderately higher on concerns over the ongoing Russian invasion of Ukraine as traders await more U.S. export data first thing tomorrow morning. March Chicago SRW futures added 5 cents to $7.3950, March Kansas City HRW futures rose 9.25 cents to $8.43, and MGEX spring wheat futures picked up 4 cents to $9.07.
Ahead of Thursday morning’s export report from USDA, analyst think the agency will show wheat sales ranging between 5.5 million and 21.1 million bushels for the week ending January 19.
In an attempt to cool high prices, India’s government plans to serve up 110 million bushels of wheat to flour millers and other bulk consumers. That’s 50% more than what traders were expecting to see. Demand remains high, even amid record-breaking prices.
Japan failed to receive any offers in its latest simultaneous buy-and-sell auction to acquire 2.6 million bushels of feed wheat and 1.8 million bushels of feed barley that closed earlier today. That grain would have been for arrival in mid-March.
So far in 2023, Ukraine has shipped a significant volume of agricultural products to Ethiopia, which is in danger of widespread famine. That includes wheat exports totaling 8.7 million bushels. Pace of shipments is relatively slow due to “artificial blocking of the grain initiative by Russian inspectors,” according to Euclid Infotech.
Iraq purchased an estimated 5.5 million bushels of wheat, likely sourced from Australia, in an international tender that closed earlier today. The grain is for shipment in April.
Jordan issued an international tender to purchase 4.4 million bushels of milling wheat from optional origins, which closes on January 31. The grain is for shipment in May and June, although Jordan has struggled to close similarly sized tenders in recent months.
Preliminary volume estimates were for 72,593 CBOT contracts, which was nearly identical to Tuesday’s final count of 72,510.
