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Corn crumbles on rising stocks

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Afternoon report: Wheat also faced significant cuts on Thursday, while soybeans trended higher

Traders were anxiously awaiting USDA’s quarterly stocks and acreage reports this morning. The prevailing question was: “Will the data help or hurt grain prices?” The answer to that question was not one farmers wanted to hear. Rising corn and wheat supplies shocked prices lower, with some contracts losing more than 4% today. Soybeans held onto decent gains through much of Thursday’s session, but nearby contracts only managed to close slightly higher. Click here to read our coverage and exclusive analysis of today’s reports.

Most of the Midwest and Plains will see at least some measurable rainfall between Friday and Monday, per the latest 72-hour cumulative precipitation map from NOAA. However, few places are likely to gather more than 0.25” during this time. NOAA’s 8-to-14-day outlook predicts that the eastern third of the country could see more seasonally wet weather between July 7 and July 13, with warmer-than-normal conditions probable for the entire central U.S.

On Wall St., the Dow tilted 170 points lower to 30,858 as a rough Q2 comes to an end. There are signs that inflation is close to peaking (or may have even already peaked), but it will take many months to unwind significantly from current levels. Energy futures saw significant cuts, with crude oil down more than 3% this afternoon on rising OPEC output, falling to $105 per barrel. Diesel was also down more than 3%, while gasoline sank nearly 4.5% lower. The U.S. Dollar softened moderately.

On Wednesday, commodity funds were net buyers of soybeans (+8,500), soymeal (+4,000) and soyoil (+1,500) contracts but were net sellers of CBOT wheat (-1,500) and roughly even trading corn contracts.

Corn

Corn prices tumbled significantly lower after USDA reported an uptick in acres and noted higher-than-expected stocks in two key reports today. July futures dropped 20.25 cents to $7.50, with September futures down 31 cents to $6.33.

Corn basis bids dropped 7 to 13 cents lower at two interior river terminal and fell 5 cents at an Ohio elevator while holding steady elsewhere across the central U.S. on Thursday.

USDA pegged corn plantings at 89.9 million acres in today’s key report, which is 4% (3.44 million acres) down from 2021’s footprint. That was very close to the average trade guess of 89.861 million acres, and slightly above USDA’s March estimate of 89.490 million acres. Expected harvest area is also down 4% from a year ago, with 81.9 million acres.

Corn stocks through June 1, 2022 increased 6% year-over-year, to 4.35 billion bushels. That was a bit higher than but very close to the average trade guess of 4.343 billion bushels. Disappearance between March and May is 3.41 billion bushels, versus 3.58 billion bushels over the same period a year ago.

Old crop corn sales fell to a marketing-year low of 3.5 million bushels in the week ending June 23. New crop sales only contributed another 4.7 million bushels, for a total of 8.2 million bushels. That was below the entire range of trade guesses, which came in between 11.8 million and 47.2 million bushels. Cumulative totals for the 2021/22 marketing year remain moderately behind last year’s pace, with 2.026 billion bushels. Corn export shipments fared much better, moving 9% higher week-over-week but fading 9% below the prior four-week average to 49.4 million bushels.

Ethanol data from the U.S. Energy Information Administration has arrived late due to “systems issues” and shows production has mostly stabilized over the past three weeks. The daily average moved slightly lower for the week ending June 24, with 1.051 million barrels, versus week-ago totals of 1.055 million barrels per day. Last week marked the sixth consecutive week that production stayed above the 1-million-barrel-per-day benchmark.

South Korea purchased 5.4 million bushels of animal feed corn from optional origins in a tender that closed earlier today. The grain is for shipment between August and October, depending on where it is sourced.

Preliminary volume estimates were for 441,794 contracts, jumping well above Wednesday’s final count of 279,626.

Soybeans

Soybean prices tested moderate gains at times today but closed with mixed results after a late-session stumble. Traders mulled USDA’s latest reports, which showed fewer-than-expected acres but higher-than-expected domestic stocks. July futures inched 0.75 cents higher to $16.75, while August futures dropped 7.75 cents to $15.6375.

Soybean basis bids were steady to soft in the central U.S. on Thursday after falling 2 to 7 cents lower across four Midwestern locations today.

Estimated soybean plantings are 1% higher from a year ago, with 88.3 million acres this season. Analysts were much more bullish in their expectations, offering an average trade guess of 90.446 million acres prior to today’s report. USDA’s March estimates were also more aggressive, when the agency pegged the 2022 footprint at 90.955 million acres.

Soybean stocks as of June 1, 2022 climbed 26% higher from a year ago, to 971 million bushels. That was slightly above the average trade guess of 965 million bushels. Disappearance between March and May reached 960 million bushels, which was up 21% from the same period last year.

Old crop soybean sales slumped to a marketing-year low last week, with net reductions of 4.4 million bushels. New crop sales contributed 4.7 million bushels, leaving a net positive of only around 300,000 bushels. That was on the very low end of trade estimates, which ranged between zero and 29.4 million bushels. Cumulative totals for the 2021/22 marketing year are still moderately below last year’s pace, with 1.901 billion bushels. Soybean export shipments tracked 5% higher week-over-week, with 19.0 million bushels.

Preliminary volume estimates were for 210,298 contracts, firming moderately versus Wednesday’s final count of 165,490.

Wheat

Wheat prices faced a round of sharp cuts as USDA raised its acreage estimates while also showing larger-than-expected stocks. Harvest pressure continues to apply additional headwinds as well. September Chicago SRW futures fell 40 cents to $8.90, September Kansas City HRW futures dropped 34.5 cents to $9.5675, and September MGEX spring wheat futures lost 35.5 cents to $9.93.

All-wheat acres firmed 1% from last season, with 47.1 million acres. That total includes 34.0 million acres of expected winter wheat plantings, plus 11.1 million spring wheat acres and 1.98 durum acres.

Wheat stocks eroded 22% lower from a year ago, meantime, to 660 million bushels. That was slightly higher than the average trade guess of 655 million bushels. Disappearance between March and May totaled 364 million bushels, which was down 22% from the same period last year.

Wheat export sales made it to 18.3 million bushels last week. That was on the higher end of trade estimates, which ranged between 7.3 million and 22.0 million bushels. Cumulative sales for the 2022/23 marketing year are fractionally below last year’s pace, with 42.6 million bushels. Wheat export shipments came in at 8.9 million bushels.

Statistics Canada will release a new round of crop planting data next Tuesday morning. Ahead of that report, analysts expect to see Canadian all-wheat plantings at 24.7 million acres. That would be a more than 1-million-acre increase from 2021’s tally of 23.4 million acres. Canadian corn plantings are expected to hold steady from a year ago, with 3.5 million acres, and Canadian soybean plantings are expected to decrease slightly to 5.2 million acres.

Egypt purchased 29.9 million bushels of wheat from several origins in a tender that recently closed. France was the primary supplier, followed by Romania, Russia and Bulgaria. The grain is for shipment between August and September.

Preliminary volume estimates were for 121,962 CBOT contracts, which was moderately higher than Wednesday’s final count of 93,280.

Settlement Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel      
22-Jul 775.25 742.25 743.75 -20.25
22-Sep 664.75 627.75 628.75 -31
Soybeans        
22-Jul 1702.75 1653.75 1675 0.75
22-Sep 1521.25 1470 1475.5 -16
Soymeal                $/ton        
22-Aug 442.5 426 435.5 4.6
Soyoil                    cents/lb        
22-Aug 69.88 66.69 67.01 -2.7
Wheat                    $/bushel        
22-Jul 917.75 869.5 868.75 -42.25
22-Sep 939.5 881 884 -40
KC Wheat        
22-Jul 999.5 951.25 948.75 -34
22-Sep 1007.25 950.75 951.75 -34.5
MPLS Wheat        
22-Jul 1021 1003 987.75 -16.5
22-Sep 1033.25 988 990 -35.5
Live Cattle             cents/lb        
22-Jun 138 136.75 138 1.2
Feeder Cattle         cents/lb        
22-Sep 176.65 173.475 176.6 2.825
Lean Hogs             cents/lb        
22-Aug 105.2 100.25 102.1 -1.475
Crude Oil  $/barrel *Energy prices may not represent final settlements
22-Aug 110.45 105.1 105.74 -4.04
Diesel        
22-Jul 4.05 3.8251 3.9083 -0.1284
Unleaded Gasoline   $/gallon        
22-Jul 3.746 3.5667 3.6294 -0.1976
Natural Gas        
22-Sep 6.575 5.327 5.482 -1.011
U.S. Dollar Index        
22-Sep 105.315 104.405 104.475 -0.374
Gold                      $/ounce        
22-Aug 1826.8 1802.5 1810.7 -3
Copper        
22-Jul 3.781 3.688 3.693 -0.086
Fertilizer Swaps     (as of 06/24)  
DAP Tampa-index           1,090.0 0
DAP-New Orleans              876.3 -11.02
Urea-New Orleans              526.4 41.34
Urea-Middle East              682.5 47.5
Urea-Black Sea              585.0 35
UAN (32%) New Orleans              576.0 -25.35

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