MORNING MARKET UPDATE

Written By Sebastian Frost

Futures Prices 8:00am CT

Overview

Grains are higher this morning following yesterday’s gains. The markets finding some strength in the surprisingly lower crop condition ratings. The markets were expecting no changes to the condition ratings, however, we saw a decrease in both corn and soybean ratings. So far, the crop tours are also adding support, as the tours have been fairly disappointing, especially for corn.


Crop Condition Highlights

Corn

  • 55% rated good/excellent (Last week 57%) (60% a year ago)

  • 97% silking (99% average)

  • 75% dough (79% average)

  • 31% dented (35% average)

Soybeans

  • 57% rated good/excellent (Last week 58%) (56% a year ago)

  • 98% blooming (98% average)

  • 84% setting pods (86% average)

Spring Wheat

  • 33% harvested (Last week 16%) (21% behind 5-year average)

  • 64% rated good/excellent (Unchanged from last week)

Winter Wheat

  • 95% harvested (Last week 90%)

Crop Tours

Yesterday we received the day 1 results for the Pro Farmer crop tour. South Dakota and Ohio results came in very disappointing. The tour data showed South Dakota corn yield averaged 118.45 bushels per acre, last year was 151.45 last. The USDA is currently forecasting the South Dakota crop at 147 bushels per acre to put these numbers into perspective.

Click here to review the full results for South Dakota.

Source: Agweb (Jenna Hoffman)

Today's Main Takeaways

Corn

The USDA once again lowered its crop condition ratings for corn, which was somewhat surprising as most expected the numbers to come in unchanged. They lowered the crop condition ratings to 55%, a 2% decrease from last weeks 57%. Majority of people believed we'd see the crops stabilize here after the cooler temperatures and rainfall we've seen lately.

Notable Changes by State

  • Pennsylvania down -10% (at 52%)

  • Nebraska down -5% (at 42%)

  • Colorado down -5% (at 31%)

  • Michigan down -5% (at 62%)

  • Kansas down -3% (at 26%)

  • South Dakota down -2% (at 48%)

  • Texas down -2% (at 17%)


So far the crop tours have also been supportive of prices, as mentioned earlier, the tours have been disappointing thus far. As it appears the soybean crop is holding up better than the corn crop in the western leg. These crop tours will show likely show that the U.S. crop is actually struggling more than the USDA currently has forecasted. The USDA will need to continue to trim their yield estimates.


Dec-22 (6 Month)


Soybeans

Soybeans slightly higher here this morning. With the crop condition ratings lowered slightly from last week to this week. The USDA lowering the ratings from 58% down to 57% rated good/excellent.

Notable Changes by State

  • Arkansas down -7% (at 64%)

  • Kansas down -5% (at 31%)

  • North Dakota down -5% (at 57%)

  • Louisiana down -3% (at 63%)

  • Nebraska down -2% (at 46%)

  • North Carolina up +7% (at 62%)

  • Missouri up +5% (at 51%)

The crop tours have also been supportive for soybeans. With the crop tour showing South Dakota soybean count at 871.40 vs last year's 996.86. The average is 1026.86. The USDA currently forecasts South Dakota's crop at 43 bushels per acre.

Another driving factor in the soybean market would also be the improved demand we've seen from China after our Taiwan situation.

Soymeal & Soyoil

  • Soymeal up +1.8 to 417.2

  • Soyoil up +0.15 to 66.50

Nov-22 (6 Month)




Wheat

Wheat firmly higher here this morning. The USDA had spring wheat at 33% harvested which is far behind our traditional pace. We are also seeing the possibility of fewer acres being planted in Russia next planting season. As well as the potential for increased demand out of China as they are currently dealing with some extreme weather. The EU production is also being affected by extreme weather conditions.

The recent news out of Ukraine is also giving support the wheat markets. As there is fear that Russia may launch yet another attack on Ukraine.

U.S. Spring Wheat Harvest

  • Idaho at 27% (Last year 69%)

  • Minnesota at 30% (Last year 30%)

  • Montana at 52% (Last year 67%)

  • North Dakota at 18% (Last year 69%)

  • South Dakota at 84% (Last year 93%)

  • Washington at 40% (Last year 83%)


Other Markets

  • Crude oil finding strength to start the week, currently up +1.35 to 91.71 this morning. Yesterday it rebounded from $4 losses early.

  • DOW slightly down

  • Cotton down -1.39 to 112.75

  • Dollar Index barely down (-0.03) to 108.950


Export Inspections

Corn

  • Inspections came in up 8 million bushels to 29.2 million

  • Did 15% of the goal

  • YTD corn inspections are are at 94.1% of the 5-year pace

Soybeans

  • Inspections were down 3 million bushels to 25.2 million

  • Did 42% of the goal

  • YTD at 100.7% of the 5-year pace

Wheat

  • Inspections were up 7 million bushels to 21.8 million

  • Did 178% of the goal

  • YTD at 83.7% of the 5-year pace


News

  • It appears there may be a Russian attack on Ukraine as Russia is gathering missiles. Following the death of the daughter of Alexander Dugin (pro-Putin intellectual).

  • Ukraine's 2022 combined grain and oilseed forecast was cut from 69.4 MMT down to 64.5 MMT

  • Brazils weather will delay their second corn crop, however harvest is still ahead of last year.

  • U.S. government urges its citizens to leave Ukraine as there is fears of attacks.

  • Unplanted acres rise sharply. As these acres have tripled from this time last year. With prevented plantings at 6.4 million according to USDA Farm Service.

  • China’s currency drops to weakest level vs the U.S. dollar is 2 years.


Weather

Source: National Weather Service

Sebastian Frost
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