Corn Futures Slide as Traders Mourn Demand Prospects

Date : 12/11/2019 @ 9:43PM
Source : Dow Jones News

Corn Futures Slide as Traders Mourn Demand Prospects

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)

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


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