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Grains mixed heading into the weekend

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Afternoon report: Soybeans reverse higher, while corn and wheat face moderate cuts

Grain prices were mixed but mostly lower after some uneven technical maneuvering on Friday. Soybeans showed some upside after a round of bargain buying recovered a portion of the steep losses incurred on Thursday. In contrast, corn prices faded 2.25% lower. Wheat losses were variable, mostly ranging between 1% and 2.75% today.

Light rain and snow will be possible in some parts of the central U.S. between Saturday and Tuesday, especially in the eastern Corn Belt and Great Lakes region, per the most recent 72-hour cumulative precipitation map from NOAA. The agency’s new 8-to-14-day outlook predicts below-average precipitation for much of the Corn Belt between December 9 and December 15, with cooler-than-normal temperatures likely for the northern half of the country during this time.

On Wall St., the Dow trended 101 points lower in afternoon trading to 34,293 on stronger-than-expected labor data – positive payroll trends are obviously a good thing for individual families but not so great when it comes to the Federal Reserve’s aggressive interest rate policy. Energy futures faced moderate to significant cuts today. Crude oil spilled 1.5% lower this afternoon to just under $80 per barrel. Diesel dropped 3.25%, while gasoline eroded 2.75% lower. The U.S. Dollar softened slightly.

On Thursday, commodity funds were net buyers of soymeal (+1,500) contracts but were net sellers of corn (-5,500), soybeans (-19,000), soyoil (-14,500) and CBOT wheat (-4,500).

Corn

Corn prices suffered another moderate technical setback on Friday after ongoing export concerns triggered another round of technical selling today that led to double-digit losses. December futures dropped 14.5 cents to $6.3550, with March futures down 14 cents to $6.4650.

Corn basis bids slid 2 to 5 cents lower at three Midwestern ethanol plants while holding steady elsewhere across the central U.S. on Friday.

With the 2022 U.S. harvest in the books, traders are increasingly looking to South America for price signals in the coming months. Production in Brazil and Argentina, coupled with global demand trends, could push corn prices a dollar higher or cause them to slump a dollar lower, according to Naomi Blohm, senior market adviser with Stewart Peterson. Blohm takes a closer look at the situation in yesterday’s Ag Marketing IQ blog – click here to learn more.

Ukraine’s total grain exports during the 2022/23 season are down nearly 30% year-over-year, according to the latest data from the country’s agriculture ministry. That includes 381.9 million bushels of corn sales, along with wheat sales totaling 253.5 million bushels. Ukraine is among the world’s top exporters of both commodities.

What is “bullish consensus” and why is it sometimes a valuable marketing indicator? According to grain market analyst Roger Wright, it’s the percentage of people who think the price of a given asset (i.e. commodity, stock, etc.) will continue to trend higher for several weeks to a few months. “The concept behind bullish consensus, aka contrary opinion, is if the vast majority of market participants think a price will go up, they have already bought or stopped selling,” he notes in today’s Ag Marketing IQ blog – click here to learn more.

Preliminary volume estimates were for 388,371 contracts, jumping well above Thursday’s final count of 199,745.

Soybeans

Soybean prices recovered around 30% of Thursday’s losses after some bargain buying commenced today. The short term focus has remained primarily on Chinese demand and South American production potential. January futures rose 10.75 cents to $14.4050, with March futures up 11.25 cents to $14.48.

Soybean basis bids were mostly steady across the central U.S. on Friday but did sink 10 cents lower at an Iowa processor and 10 cents at an Iowa river terminal on Friday.

Earlier this week, USDA reported that farm sector income reached new record levels in 2022, climbing 7% above 2021 levels to an unprecedented $160.5 million bushels. Farm Futures grain market analyst Jacqueline Holland explores more of the report’s key numbers in her latest E-corn-omics blog – click here to learn more.

In Argentina, the Rosario grains exchange is assessing the potential quality and yield damages caused by ongoing drought, adding that more hot, dry conditions are in the short-term forecast. “A lack of water and high temperatures in recent weeks left numerous soybean fields in critical condition. Most of these fields are located in the east and southwest,” according to the exchange, which pegs production estimates at around 1.764 billion bushels.

China plans to auction off another 18.4 million bushels of its imported soybean reserves on December 9, according to a new statement from the country’s National Grain Trade Center. China has offered a series of similarly sized auctions throughout 2022 to boost local supplies and quell high prices.

Preliminary volume estimates were for 167,740 contracts, which was moderately below Thursday’s final count of 243,220.

Wheat

Wheat prices carved out fresh three-month lows on another round of technical selling on Friday. Some contracts were down almost 3% by the close. December Chicago SRW futures fell 21.5 cents to $7.3725, December Kansas City HRW futures lost 25 cents to $8.78, and December MGEX spring wheat futures dropped 10.25 cents to $9.4425.

A report from Statistics Canada released this morning showed updated all-wheat production estimates at 1.242 billion bushels. That’s 2.6% below its prior estimate in September but would be 52% higher from last season’s drought-plagued production, if realized.

Argentina has faced plenty of drought conditions so far in the 2022/23 production season, and the Buenos Aires grains exchange is warning that additional wheat production cuts could be warranted if overly dry weather continues to play out. Harvest progress is at 23% so far, versus 2021’s pace of 22%. Current production estimates are far below initial estimates of 753.2 million bushels, spilling all the way down to 455.6 million bushels.

French farm office FranceAgriMer reports that 2022/23 soft wheat crop quality continues to be pristine, with 98% rated in good-to-excellent condition through November 28. Plantings are close to being finished for Europe’s No. 1 wheat producer, including 99% of the soft wheat crop and 89% for durum. Mild weather has kept physiological progress running six to seven days ahead of the prior five-year average.

If you haven’t ventured onto FarmFutures.com in a few days, our Friday feature “7 ag stories you might have missed” is an easy way to quickly catch up on the industry’s top headlines. The latest batch of content includes stories on a congressional bill to avert a nationwide rail strike, a list of practical gives “every farmer is sure to love” and more – click here to get started.

Preliminary volume estimates were for 71,135 CBOT contracts, tracking slightly above Thursday’s final count of 67,919.

Settlement Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel      
22-Dec 650.25 629 635 -14.5
23-Mar 660.5 645.75 646.25 -14
Soybeans        
23-Jan 1443 1425.5 1438.5 10.75
23-Mar 1450.5 1432.25 1446.5 11.25
Soymeal                $/ton        
23-Jan 425 419.4 424.1 3.4
Soyoil                    cents/lb        
23-Jan 67.01 64.5 65.22 -2.19
Wheat                    $/bushel        
22-Dec 750 738.5 737.25 -21.5
23-Mar 783 755.75 761 -23
KC Wheat        
22-Dec 887 865.5 882 -25
23-Mar 889.5 860.25 870.75 -19.25
MPLS Wheat        
22-Dec 944.5 939.25 939.75 -10.25
23-Mar 938 919.25 921.25 -18.75
Live Cattle             cents/lb        
22-Dec 153.575 152.9 153.25 0.2
Feeder Cattle         cents/lb        
23-Mar 185.575 184.175 185.25 0.95
Lean Hogs             cents/lb        
23-Feb 90.575 88.4 90.425 1.225
Crude Oil  $/barrel *Energy prices may not represent final settlements
23-Jan 82.22 79.65 80.1 -1.12
Diesel        
23-Jan 3.3156 3.1475 3.1715 -0.0909
Unleaded Gasoline   $/gallon        
23-Jan 2.3614 2.2701 2.2877 -0.0543
Natural Gas        
23-Feb 6.729 6.124 6.137 -0.494
U.S. Dollar Index        
22-Dec 105.575 104.325 104.59 -0.099
Gold                      $/ounce        
23-Jan 1811.5 1786 1796 -5.1
Copper        
22-Dec 3.8585 3.756 3.8585 0.0445
Fertilizer Swaps     (as of 12/02)  
DAP Tampa-index              692.0 -8
DAP-New Orleans              630.0 0
Urea-New Orleans              512.5 0
Urea-Middle East              556.5 -31
Urea-Black Sea              585.0 35
UAN (32%) New Orleans              535.0 0

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