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Grains lightly mixed in quiet session

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Afternoon report: Corn trends slightly lower Tuesday, while soybeans move modestly higher

Grain prices were lightly mixed on Tuesday as traders await fresh signals on several fronts, including whether China will ease Covid-19 restrictions currently in place. South American weather forecasts and the ongoing Russian invasion of Ukraine are still in focus as well. Corn prices faded around 0.4% lower, while soybeans captured small gains. Wheat prices were mixed but mostly lower.

The Northern Plains and eastern Corn Belt could see some additional rain and/or snow fall between Wednesday and Saturday, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s new 8-to-14-day outlook predicts drier-than-normal conditions will emerge across the Great Lakes region between December 6 and December 12, with seasonally cool weather spreading across the Plains and Midwest during this time.

On Wall St, the Dow eased 43 points in afternoon trading to 33,806 as traders await fresh jobs data out later this week and noted a downward slide in Chinese Covid-19 cases. That news also helped energy futures move higher. Crude oil firmed 1.25% this afternoon to $78 per barrel. Diesel rose more than 2.5%, while gasoline posted narrowly mixed results. The U.S. Dollar firmed slightly.

On Monday, commodity funds were net buyers of soybeans (+8,500), soymeal (+3,500) and soyoil (+5,000) contracts but were net sellers of CBOT wheat (-9,500) and were roughly even when trading corn contracts yesterday.

Corn

Corn prices suffered a small technical setback in overnight trading and were unable to overcome that trend in today’s session, closing with losses of around 0.4% following a round of technical selling. December futures dropped 2.75 cents to $6.66, with March futures down 2.25 cents to $6.69.

Corn basis bids were mostly steady across the central U.S. on Tuesday but did firm 3 cents at an Illinois river terminal while sliding 2 to 4 cents lower at two other Midwestern locations today.

The United States is considering legal action against Mexico amid its plans to ban all GMO corn imports by 2024. This move would be a violation of the USMCA trade pact, according to Secretary of Agriculture Tom Vilsack. "I emphasized in no uncertain terms that - absent acceptable resolution of the issue – the U.S. Government would be forced to consider all options, including taking formal steps to enforce our legal rights under the USMCA,” he said. “Mexico's import ban would cause both massive economic losses for Mexico’s agricultural industries and citizens, as well as place an unjustified burden on U.S. farmers.”

USDA now projects the 2022/23 Brazilian corn crop will reach a record-breaking production of 4.960 billion bushels. That would be a year-over-year increase of 8.6%, if realized. Exports during the current marketing year are expected to reach 1.850 billion bushels.

Meantime, Brazil’s Anec estimates that the country’s corn exports in November will reach 233.8 million bushels, which is moderately lower than its prior projection a week earlier.

European Union corn imports during the 2022/23 marketing year are more than doubling last year’s pace so far, with 480.3 million bushels through November 27. Spain, the Netherlands, Poland, Portugal and Italy have been the top five buyers.

South Korea purchased 2.8 million bushels of animal feed corn, likely sourced from South America or South Africa, in an international tender that closed earlier today. The grain is for arrival in March.

Preliminary volume estimates were for 304,434 contracts, tracking moderately lower than Monday’s final count of 358,849.

Soybeans

Soybean prices held onto modest gains following a somewhat choppy session on Tuesday as traders await updates on the possible easing of covid-related lockdowns in China, which would be bullish for demand. January futures added 1.75 cents to $14.59, with March futures up 2 cents to $14.6475.

Soybean basis bids were mostly steady across the central U.S. on Tuesday but did tilt 10 cents higher at an Illinois river terminal and 5 cents lower at an Iowa processor today. Farmer sales have been generally slow so far this week.

Will corn and soybean prices have “room to run” in 2023? Grain market analyst Bryce Knorr sees some positive potential this coming year. “November 2023 soybean futures have been stuck in a trading range all fall, but that’s par for the course,” he notes. “Futures tend to rally on average through the spring and into June, even in years of normal production. And in bullish years gains can keep going, sometimes into the end of summer or beyond.” Knorr offers additional analysis in yesterday’s Ag Marketing IQ blog – click here to learn more.

European Union soybean imports during the 2022/23 marketing year reached 157.3 million bushels through November 27, which is moderately below last year’s pace so far. EU soymeal imports were also slightly lower year-over-year, with 6.54 million metric tons during the same period.

Brazil’s Anec estimates that the country’s soybean exports will reach 75.4 million bushels in November, which is modestly lower than its prior estimate from a week earlier. Anec also estimates that the country’s soymeal exports will reach 1.485 million metric tons this month.

Preliminary volume estimates were for 171,787 contracts, shifting slightly above Monday’s final count of 167,692.

Wheat

Wheat prices were lightly mixed but mostly lower after an uneven round of technical maneuvering on Tuesday. December Chicago SRW futures picked up 1.75 cents to $7.5850, while December Kansas City HRW futures eased 1.25 cents to $9.0350 and December MGEX spring wheat futures dropped 2.25 cents to $9.49.

Ahead of an upcoming Statistics Canada crop production report out Friday morning, analysts expect to see 2022/23 Canadian all-wheat production estimates reach 1.279 billion bushels.

Brazil is already anticipating record-breaking corn and soybean crops for the 2022/23 marketing year, but USDA reports that the country could see wheat production also reach unprecedented levels this season, serving up an estimate of 345.4 million bushels. That would be 21% above last season’s total, if realized.

European Union soft wheat exports during the 2022/23 marketing year 510.4 million bushels through November 27, which is slightly ahead of last year’s pace so far. Algeria, Morocco, Egypt, Nigeria and Saudi Arabia were the top five destinations.

Turkey purchased 16.7 million bushels of wheat, expected to be largely sourced from Ukraine, in an international tender that closed earlier today. The purchase is still considered provisional at this time. The grain is for shipment between early December and mid-February.

Due to “system outages,” USDA has not yet published its latest crop progress report, which was originally scheduled to be released on Monday afternoon, and which covers the week through November 27. Analysts are expecting to see winter wheat quality ratings improve a point, with 33% of the crop in good-to-excellent condition. (Individual trade guesses ranged between 32% and 35%.)

Preliminary volume estimates were for 77,540 CBOT contracts, falling moderately below Monday’s final count of 138,598.

Settlement Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel      
22-Dec 671.25 665.25 665.75 -2.75
23-Mar 674 668 669.5 -2.25
Soybeans        
23-Jan 1468.5 1449 1459.5 1.75
23-Mar 1474 1454.5 1466 2
Soymeal                $/ton        
23-Jan 411.4 406.3 407.6 -3.6
Soyoil                    cents/lb        
23-Jan 74.46 72.5 72.98 -0.2
Wheat                    $/bushel        
22-Dec 769 753.75 757.75 1.75
23-Mar 792 777.5 781.5 2.25
KC Wheat        
22-Dec 915.25 896.25 901 -1.25
23-Mar 902.5 884.25 887 -4.75
MPLS Wheat        
22-Dec 960.25 937 940.25 -2.25
23-Mar 946 933.75 934.5 1.25
Live Cattle             cents/lb        
22-Dec 152.975 152.4 152.675 0.1
Feeder Cattle         cents/lb        
23-Mar 181.5 180.375 181.3 0.7
Lean Hogs             cents/lb        
23-Feb 85.475 84.025 84.125 -0.625
Crude Oil  $/barrel *Energy prices may not represent final settlements
23-Jan 79.65 76.29 78.39 1.15
Diesel        
22-Dec 3.3293 3.1732 3.2964 0.081
Unleaded Gasoline   $/gallon        
22-Dec 2.3871 2.2849 2.3294 -0.0012
Natural Gas        
23-Feb 7.249 6.944 7.094 0.076
U.S. Dollar Index        
22-Dec 106.79 105.995 106.78 0.148
Gold                      $/ounce        
23-Jan 1765 1746 1747.9 7.6
Copper        
22-Dec 3.677 3.5905 3.63 0.0185
Fertilizer Swaps     (as of 11/18)  
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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