Wheat Futures Slip as Rainfall Returns to Eastern Europe
June 02 2020 - 4:13PM
Dow Jones News
By Kirk Maltais
--Wheat for July delivery fell 1.4% to $5.08 a bushel on the
Chicago Board of Trade on Tuesday, amid evidence that crops in
Ukraine and Russia are receiving some much-needed rain and are
looking larger than anticipated.
--Corn for July delivery rose 0.3% to $3.24 1/4 a bushel.
--Soybeans for July delivery rose 1.2% to $8.50 1/2 a
bushel.
HIGHLIGHTS
Dream On: Egypt, the world's largest wheat importer, bought
120,000 metric tons of Ukrainian wheat at an international tender,
according to traders. The cargoes bought were the two cheapest
offers of eight bids and priced at $210 a metric ton, not including
shipping. Weather forecasts point to beneficial rain falling on the
current Ukraine wheat crop, and a local consultancy group raised
its production forecast to 26.65 million tons of the grain from
25.36 million tons previously.
Walk This Way: Recent weakness in the U.S. dollar, due in part
to civil unrest across the country, provided support for grains
futures. "The U.S. dollar has extended its slide and this morning
has reached to the lowest level traded since mid-March," said Dan
Hueber of the Hueber Report. "Do keep in mind that this just
returns our currency to levels we traded at throughout much of
2019, but long-term charts give the impression that there should be
more weakness ahead." A weaker dollar makes U.S. exports more
competitive overseas.
Back in the Saddle: The USDA confirmed reports that China bought
more soybeans from the U.S., noting a 132,000-metric-ton purchase
for shipment to China in the 2020/21 marketing year. "The U.S. and
China appear to have avoided any political spill-over [from recent
tensions] to the Phase 1 trade deal, which is a positive
development for US agriculture," AgResource said.
INSIGHT
Cry Me A River: Corn planting in the U.S. has stayed on the fast
track -- the USDA said Monday that 93% of the U.S. corn crop has
been planted, much higher than 64% at this time last year.
Additionally, 74% of the corn crop is considered in
good-to-excellent condition, up from 70% last week. For grains
traders, the real question at this point is if corn demand will
recover enough from coronavirus issues to eat into this year's
sizable crop. "At this point the supply story is just too good and
the demand story too uncertain," said Tomm Pfitzenmaier of Summit
Commodity Brokerage.
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 02, 2020 15:58 ET (19:58 GMT)
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