Wheat Leads Price Declines as July Expiration Looms

Date : 06/18/2019 @ 9:12PM
Source : Dow Jones News

Wheat Leads Price Declines as July Expiration Looms

By Kirk Maltais

 

--Wheat for July delivery fell 1.5% to $5.31 1/2 a bushel on the Chicago Board of Trade on Tuesday, as positioning ahead of July options expirations on Friday fed into an already volatile market.

--Corn for July delivery slid 1.1% to $4.49 3/4 a bushel.

--Soybeans for July delivery rose 0.1% to $9.13 1/2 a bushel.

 

HIGHLIGHTS

 

Extra Volatile: Uncertainty about delayed planting is adding to the volatility grains futures normally see as the deadline for July options approaches, Jason Britt of Central State Commodities said. "Friday is going to be busy for us, depending on where prices are," Mr. Britt said. Grains futures in general have been on the rise, but Mr. Britt says their movement near deadlines tend to go against prevailing trends.

Take the Money and Run: Grain markets fell despite Monday's crop report suggesting 6 million-8 million acres of corn may not be planted this year, possibly reducing corn production by 600 million-800 million bushels. Traders think corn futures have found a top in the near term, leading to profit-taking. "The lack of a bullish surprise in the weekly crop progress report added to overnight pressure," Karl Setzer of AgriVisor said.

Can't Decide: Despite closing practically unchanged, soybean trading was choppy following President Trump's tweet regarding resumed communications with Chinese President Xi. "Beans traded both sides of unchanged multiple times today, starting down on 'buy the rumor, sell the fact' trading off the crop progress numbers, but coming back on good Chinese pricing," Charlie Sernatinger of EDF Man Capital said.

 

INSIGHT

 

Numbers Don't Lie: Corn acres in the Midwest, which are normally 100% planted by this time of year, are behind schedule at 92%, according to USDA data released Monday. The scale of the possible decline in 2019/20 bushels isn't yet clear. Rain returned to the Midwest, harming the quality of the plants, and about 59% of sprouted corn is in good or excellent condition, down from 78% at this time last year. The rain is also slowing soybean planting down, with 77% of the acreage sown, down from an average of 93%.

Big in Japan: USTR Robert Lighthizer said negotiations continue to further open Japan to American agricultural and livestock exports -- especially important considering the U.S. trade standoff with China. Mr. Lighthizer, testifying to the Senate Finance Committee on Tuesday, said the U.S. is "making headway" with working out a larger agreement with Japan, with more progress expected during the G-20 summit in Osaka.

 

AHEAD

 

--The EIA releases its ethanol data at 10:30 a.m. EDT Wednesday.

--The USDA will release its latest weekly export sales numbers at 8:30 a.m. EDT Thursday.

--The USDA will issue its monthly Cattle on Feed report at 3 p.m. EDT Friday.

 

Write to Kirk Maltais at kirk.maltais@wsj.com

(END) Dow Jones Newswires

June 18, 2019 15:57 ET (19:57 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.


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