Corn Futures Wilt as Dollar Strengthens
February 19 2020 - 4:20PM
Dow Jones News
By Kirk Maltais
--Corn for March delivery fell 0.7% to $3.80 1/2 a bushel on the
Chicago Board of Trade on Wednesday, with the stronger dollar
pressuring the competitiveness of U.S. grain exports.
--Wheat for March delivery lost 0.3% to $5.65 1/4 a bushel.
--Soybeans for March delivery rose 0.6% to $8.97 1/4 a
bushel.
HIGHLIGHTS
Haven't Got Time for the Pain: The week-long U.S. dollar rally
is becoming a significant source of pressure for grain futures.
Since last Wednesday, the greenback has gained 1%. A stronger
dollar makes exports of U.S. agricultural goods less attractive to
buyers, bad news when corn traders are hoping to see higher export
demand and supply worldwide is looking about as robust as last
year.
Coming Around Again: Traders locked in profits after wheat
futures surged 4.4% Tuesday on expectations of the smallest
Australian wheat crop in 12 years. Arlan Suderman of INTL FCStone
called it a correction of "irrational exuberance" in trading to
start the week. He's also skeptical about the USDA's Agricultural
Outlook Forum this week. "I've been in this business for nearly
four decades, and I cannot recall a single new trend revealed by
the Forum's outlook that wasn't already known," Mr. Suderman
said.
Nobody Does It Better: Soybean crush figures reached a
record-high 176.9 million bushels in January, according to the
National Oilseed Processors Association. "Good profitability and
strong meal demand continues to drive crush higher," RJO Futures
said.
INSIGHT
Anticipation: Traders are mostly pessimistic about the forecasts
the USDA will release at the Agricultural Outlook Forum, but there
is one area they will be keeping a close eye on. "The new hope is
that the Outlook Forum will be a little more optimistic about the
(corn) export potential," said Tomm Pfitzenmaier of Summit
Commodity Brokerage. The USDA last week lowered its projection for
2019/20 U.S. corn exports to 47 million metric tons.
AHEAD
--The USDA holds its annual Agricultural Outlook Forum in
Arlington, Va., on Thursday and Friday.
--Deere & Co. reports its first-quarter earnings before the
market opens Friday.
--The USDA will release its latest weekly export sales numbers
at 8:30 a.m. ET Friday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
February 19, 2020 16:05 ET (21:05 GMT)
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