Wheat, Corn and Soybeans Drop Amid Lack of Fresh News
June 19 2019 - 4:14PM
Dow Jones News
By Kirk Maltais
-- Corn for July delivery fell 2% to $4.41 a bushel at the
Chicago Board of Trade on Wednesday as traders grapple with their
unanswered questions about crop acreage as a result of the
waterlogged Midwestern soil.
-- Wheat for July delivery fell 1.7% to $5.22 1/4 a bushel.
-- Soybeans for July delivery fell 1.1% to $9.03 1/4 a
bushel.
HIGHLIGHTS
Dry Days: A break from the streak of wet weather in the Midwest
weighed on grains futures Wednesday.
"To highlight the uniqueness of 2019, a drier forecast on June
19 is viewed as bearish," says Doug Bergman of RCM Alternatives.
Both wheat and soybean movement is being led by corn, he said,
making the movement of the market dependent on how much less supply
traders think will be available for the 2019-20 marketing year.
Traders say that more rain in the Midwest would limit farmers'
ability to plant more than it has already, forcing buyers to eat
into inventories built up from the previous year.
Fed Decision: The decision of the Federal Reserve to keep the
fed-funds range unchanged at 2.25%-2.50% caused little movement in
grains futures. In a statement accompanying the 2 p.m. EDT
announcement, the Federal Reserve is no longer taking a "patient"
stance, indicating a possible rate cut later this year and
suggesting anticipated economic weakness.
INSIGHT
Apprehension: Despite the new wave of optimism surrounding news
that President Trump and Chinese President Xi will meet at the G20
Summit in Osaka, Japan, next week, grains traders are impatient to
see results from the talks.
"Although President Trump sounds optimistic on a U.S.-China
trade deal, the ag markets are more pensive -- being down this
track once before," says AgResource. "Ag traders are unlikely to
react to U.S.-China trade talk until a deal is signed."
Leading grains down were wheat futures, which AgResource
attributes to be too high-priced for buyers such as Egypt to
consider buying instead of from Russian or Eastern European
competition.
Ethanol Drops: U.S. production of ethanol declined this week,
falling 1.6% to 1.081 million barrels per day. Despite the slip,
the decline didn't completely eat the gains posted in ethanol
production last week of 4.2%.
Meanwhile, ethanol inventories totaled 21.613 million barrels,
the lowest level in over a year. Despite the seemingly bullish
data, markets didn't react.
Ethanol is tied to corn prices since it is used to produce
ethanol.
AHEAD
-- The USDA is scheduled to release its latest weekly export
sales at 8:30 a.m. EDT Thursday.
-- The USDA is scheduled to issue its monthly Cattle on Feed
Report at 3 p.m. EDT Friday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
June 19, 2019 15:59 ET (19:59 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.