Corn Futures Slide as Traders Mourn Demand Prospects
December 11 2019 - 4:43PM
Dow Jones News
By Kirk Maltais
--Corn for March delivery fell 1.5% to $3.71 1/4 a bushel on the
Chicago Board of Trade on Wednesday, with traders bearish as they
digested the previous day's WASDE report.
--Soybeans for January delivery lost 0.9% to $8.93 1/2 a
bushel.
--Wheat for March delivery fell 0.9% to $5.19 1/4 a bushel.
HIGHLIGHTS
WASDE Hangover: The USDA's monthly estimates didn't provide any
updates on crop yields or production, and the agency's experts kept
the demand outlook for corn and soybeans stable, although they did
predict higher demand for wheat. While traders hadn't been
expecting much from the report, even a small boost to corn demand
would have been welcome. "The December WASDE report did not contain
any friendly surprises, so without any other friendly news, the
market is taking a pause here," said Tomm Pfitzenmaier of Summit
Commodity Brokerage.
Trump Watch: Grain traders are keeping a close eye on President
Trump ahead of Sunday's deadline for a U.S.-China trade deal.
Traders were happy to hear on Tuesday that both sides may agree to
delay new tariffs, but no new details emerged Wednesday. Traders
have seen this show before.
INSIGHT
China Steps Up: About 585,000 metric tons of U.S. soybeans were
sold to China for delivery in the 2019/20 marketing year, the USDA
said. Additionally, 140,000 tons of soybeans were sold for delivery
to unknown destinations (read: China). The USDA's confirmation of
the sales lends credence to news reports Monday that Chinese buyers
had purchased a large amount of beans.
Ethanol's Winning Streak: Production of the biofuel rose for the
11th week in a row, reaching 1.07 million barrels a day, which was
the highest level since early July. However, ethanol stockpiles
also rose, presenting corn traders with a good news/bad news
scenario. Higher production is good for corn demand, but larger
stockpiles suggest that demand could hit a wall.
Export Slow Mo: U.S. exports likely remained tepid in the past
week, which would throw a wrench into any hopes that export demand
could jump enough to meet USDA targets. Traders polled by The Wall
Street Journal lowered their estimated ranges from last week,
expecting wheat exports of 200,000 to 450,000 metric tons, corn
exports of 400,000 to 800,000 tons, and soybeans at 500,000 to 1.1
million tons. Corn exports are currently 7% behind the pace needed
to reach 1.85 billion bushels this year, the USDA's estimate.
AHEAD
--The USDA will release its latest weekly export sales numbers
at 8:30 a.m. ET Thursday.
--The CFTC will release its weekly commitment of traders data at
3:30 p.m. ET Friday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
December 11, 2019 16:28 ET (21:28 GMT)
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