Corn Futures Slide as Weather Conditions Improve
November 20 2019 - 4:28PM
Dow Jones News
By Kirk Maltais
--Corn for December delivery fell 0.9% to $3.66 3/4 a bushel on
the Chicago Board of Trade on Wednesday, as weather conditions
globally seem to have improved, allowing supply competitive to U.S.
exports to build.
--Soybeans for January delivery fell 0.7% to $9.05 a bushel.
--Wheat for March delivery rose 0.7% to $5.18 3/4 a bushel.
HIGHLIGHTS
Better Weather Blues: Managed money funds sold an estimated
4,600 corn contracts, the equivalent of 23 million bushels, on a
favorable weather forecast in South America, according to
AgResource. "Any real heat is absent or confined to just a few
days," the firm said. The selloff in corn is likely to continue. "A
fundamental spark is needed via either adverse South American
weather or a U.S./China trade deal to produce meaningful
short-covering," AgResource said.
The Art of the Deal: Soybean traders turned pessimistic again
after a Reuters report, citing unnamed sources, said a partial
U.S.-China trade deal might not materialize until next year.
President Trump has been talking up the agreement, saying Tuesday
that he was happy with the negotiations. On Wednesday he said China
wants to make a deal. While the trade conflict drags on, China
appears to be buying U.S. soybeans, although grains traders like to
think the purchases would be larger without the deal drama.
INSIGHT
Bottom of the Barrel: U.S. ethanol inventories fell last week to
the lowest level since September 2016, a new low for stockpiles,
while production rose to 1.03 million barrels a day. The deep cut
into inventories should have been bullish for U.S. corn futures, as
traders are desperate for better indicators of corn consumption,
but futures didn't finish higher.
Crystal-Ball Gazing: Trader estimates for grain export sales to
be reported by the USDA on Thursday are in line with last week's
predictions, according to data gathered by The Wall Street Journal.
However, traders are leaving open the possibility of higher corn
and soymeal sales, with forecasts topping out at 900,000 metric
tons and 450,000 tons respectively. For corn, total sales hitting
the high end of trader forecasts would be a bullish development,
but not enough on its own to reverse the narrative of poor export
demand for U.S. corn.
AHEAD
--The USDA will release its latest weekly export sales numbers
at 8:30 a.m. ET Thursday.
--The USDA will release its monthly Cattle on Feed report at 3
p.m. ET Friday.
--The USDA will release its monthly cold storage report at 3
p.m. ET Friday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
November 20, 2019 16:13 ET (21:13 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.