Wheat Down On Expectations of Strong Planting Progress
June 01 2020 - 4:01PM
Dow Jones News
By Kirk Maltais
--Wheat for July delivery fell 1.1% to $5.15 1/4 a bushel on the
Chicago Board of Trade Monday as grains traders expect the USDA to
report strong gains in winter wheat crop development.
--Corn for July delivery fell 0.8% to $3.23 1/4 a bushel.
--Soybeans for July delivery fell 0.1% to $8.40 1/2 a
bushel.
HIGHLIGHTS
Too Much Progress?: The USDA's planting progress report,
released at 4 pm ET Monday, is expected to show big gains in wheat
planting over the past week. "The trade will be looking for winter
wheat to be 85% headed, against 68% on our last report, with
harvest numbers expected around 4%, " said Charlie Sernatinger of
ED&F Man Capital. The weather in the Midwest is expected to
stay supportive for the planting and growth of crops across the
board, putting pressure on the CBOT as a whole Monday.
Tension Headaches: Also weighing on grains are worries about
renewed U.S.-China tensions. It's unclear if China has instructed
state grain buyers to stop buying from the U.S. But some traders
say China simply cannot ignore U.S. supplies when making purchase
decisions. "Soybeans quickly traded back into positive territory on
thoughts that China will have no choice but to return soon, while
corn and wheat are still negative," said Arlan Suderman of INTL
FCStone.
INSIGHT
Coming Up Short: Exports coming from the U.S. fell 29.9% in
April, the biggest one-month decline since 2002, according to
Panjiva, the supply chain research unit of S&P Global Market
Intelligence. While the main factor was a 70.8% decrease in auto
shipments from the U.S., exports of grain and meat products to
China also contributed to the fall, Panjiva said. Food exports
overall dropped 5.3%. "The slide would suggest Chinese plans to
boost commodities purchasing under the phase 1 trade deal between
the two countries has yet to have a significant effect," the firm
said.
Comfortable Cotton: Cotton futures on the Intercontinental
Exchange traded at their highest level since mid-March, finishing
up 4.3% at over 60 cents per pound. The reason for today's uptick
is the belief China may not opt to cut its purchasing of U.S.
cotton, even if it does stop purchasing U.S. soybeans and other
agricultural products. "Traders are viewing cotton as a better
alternative to be long in the ag space over soybeans, as China
cotton commitments on U.S. cotton thus far have not been altered or
recently reduced from either COFCO or Sinograin," said Josh Graves
of RJO Futures.
Strong Finish: The U.S. soybean crop is expected to post a big
jump toward completing planting of 83.5 million acres of soybeans
this year. Roughly 82% to 85% of that crop is expected to show as
planted in the USDA's weekly crop progress report, said Tomm
Pfitzenmaier of Summit Commodity Brokerage. Last week, 65% of the
crop had been planted - well above last year's 26%. Meanwhile, corn
progress is expected between 90%-95%, and today's report will be
the first to show the condition of the soybean crop.
AHEAD:
--The EIA releases its weekly update on ethanol production and
inventories at 10:30 a.m. ET Wednesday.
--The USDA will release its latest weekly export sales numbers
at 8:30 a.m. ET Thursday.
--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
June 01, 2020 15:46 ET (19:46 GMT)
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