Wheat Futures Slide After Hitting Highest Price in More Than a Year
January 22 2020 - 3:58PM
Dow Jones News
By Kirk Maltais
--Wheat for March delivery fell 0.6% to $5.77 3/4 a bushel on
the Chicago Board of Trade on Wednesday, with traders selling off
the 17-month intraday high reached in the morning.
--Soybeans for March delivery lost 0.3% to $9.13 3/4 a
bushel.
--Corn for March delivery rose 0.3% to $3.88 3/4 a bushel.
HIGHLIGHTS
Profits Taken: Wheat futures surged above $5.92 a bushel on
global supply concerns, prompting traders to lock in profits. "We
have no fundamental reason why it broke," said Terry Reilly of
Futures International. Temperatures are well above normal in the
Black Sea region, melting snow cover and leaving the wheat
vulnerable to any cold wave that might move through the area.
Soggy: Much like last year, soils are getting waterlogged in the
Midwest, which could signal another tough year for spring planting,
said Arlan Suderman of INTL FCStone. "Soils are saturated across
the Midwest, with the northern Midwest featuring a heavy snow pack
containing more than 4" of rainfall equivalent," Mr. Suderman
said.
INSIGHT
Soy-nami: Brazil's record harvest of soybeans is expected to hit
the market in the next two to three weeks, keeping U.S. futures
prices depressed, said British research firm Marex Spectron. At the
moment, soybean supplies are outpacing demand, and Asian purchases
have been lower than expected. "We continue to believe that one of
the reasons behind the elevated supply is the rush to release beans
from inventory holdings across the supply chain" before the
Brazilian harvest arrives, Marex said.
Reading the Tea Leaves: The U.S.-China trade deal, signed last
week, caused some consternation in the futures market over
Beijing's declaration that it would make its U.S. purchases
depending on need and global market conditions. Bob Maltsbarger of
IHS Markit said the concerns are likely overstated. Soybean
harvests in the U.S. and Brazil, the two biggest producers of the
oilseed, occur at different times of the year, allowing the caveat
of "market conditions," Mr. Maltsbarger said. China just wants to
ensure it's getting the best price, he said. "It would almost be
ridiculous for them not to have something like that" in the deal,
he said.
AHEAD
--The EIA releases its weekly update on ethanol production and
inventories at 11 a.m. ET Thursday.
--The USDA will release its latest weekly export sales numbers
at 8:30 a.m. ET Friday.
--The CFTC releases its weekly commitment of traders report at
3:30 p.m. ET Friday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
January 22, 2020 15:43 ET (20:43 GMT)
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