Soybeans Claw Back Some Coronavirus Losses
February 25 2020 - 4:13PM
Dow Jones News
By Kirk Maltais
--Soybeans for May delivery rose 0.7% to $8.88 1/4 a bushel on
the Chicago Board of Trade on Tuesday, bouncing back for the day as
some traders saw an opportunity to buy into grain futures at lower
prices.
--Wheat for May delivery rose 0.4% to $5.37 a bushel.
--Corn for May delivery rose 0.1% to $3.76 1/2 a bushel.
HIGHLIGHTS
Selling Slowdown: Soybean futures led a slight rebound Tuesday,
diverging from the roughly 800-point drop on the Dow Jones
Industrial Average. One reason for the push higher is traders saw
an opportunity for new grain buying as livestock futures continue
to decline in response to coronavirus, said John Payne of Daniels
Trading. "That's all I can figure, there's nothing else," said
Payne. While grains rose, live cattle futures fell another 2%, and
hogs only rose by 0.1%.
Bad Weather Wishes?: The brief break from sliding futures isn't
expected to last long, said AgResource. "Following Monday's sharp
decline, the CBOT is afforded to catch its breath, but it's
doubtful that any lasting rally can unfold without adverse
weather," says the firm. However, the Midwest is projected to have
above-average temperatures this week, with precipitation near to
below average for the next 6-10 days.
INSIGHT
Wheat Eaters: Traders have been speculating that Russia and
Ukraine will produce larger-than-expected wheat crops, but current
U.S. futures dynamics may soon turn. "The market is loaded up with
speculative length, so look for more downside as the market pushes
out weak longs," said Doug Bergman of RCM Alternatives. "Let the
market trade lower, but look for signs that selling interest is
waning to step back in as a buyer."
Corn Clingers: Corn futures may be receiving support from
farmers holding on to their old-crop corn inventories while waiting
for higher prices. "Producer grain holding remains the popular
explanation for a strong basis and small futures spreads," said
Todd Hubbs with the University of Illinois. "If that is the case,
basis levels should weaken whenever producers give up and move old
crop stocks." Unless demand for corn increases in a big way, it
will take tough planting or harvesting conditions for corn prices
to go higher, Mr. Hubbs said.
AHEAD
--The EIA releases its weekly update on ethanol production and
inventories at 10:30 a.m. ET Wednesday.
--Bayer AG, owner of Monsanto, releases its full-year earnings
on Thursday.
--Beyond Meat Inc. releases its fourth-quarter earnings on
Thursday.
--The USDA will release its latest weekly export sales numbers
at 8:30 a.m. ET Thursday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
February 25, 2020 15:58 ET (20:58 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.