Wheat Rises on Diminished Harvest
July 08 2020 - 3:49PM
Dow Jones News
By Kirk Maltais
--Wheat for September delivery rose 4.3% to $5.16 1/2 a bushel
on the Chicago Board of Trade Wednesday, as managed money investors
piled into wheat in reaction to reports of slower-than-expected
harvests by competitors on the export market.
--Corn for December delivery rose 0.5% to $3.54 1/4 a
bushel.
--Soybeans for November delivery fell 0.6% to $8.97 1/4 a
bushel.
HIGHLIGHTS
Worried About Wheat: Wheat futures perked up Wednesday thanks to
a wave of interest from managed money investors after projections
of lower wheat harvests worldwide. "Traders are fundamentally
focused on declining production estimates in the United States,
Argentina, France and the Black Sea Region," said Arlan Suderman of
StoneX. "That's pushed global prices higher in recent days, turning
chart signals that sparked computer momentum signals that
accelerated gains today."
All Wet: Corn and soybean futures were weak on a change in
weather forecasts that include more rain. "The forecast appears to
have enough rain over the next 10-days to prevent any widespread
crop problems," said Doug Bergman of RCM Alternatives. Traders may
shift their focus from weather issues over to projections for this
week's WASDE report from the USDA, which will contain updated
production and yield figures for the 2020 crop.
No Show: The USDA again didn't announce any new large sales of
U.S. soybean exports to China on Wednesday - which contributed to
pressure on soybean futures. "Beans caught some liquidation of
bean/corn spreads with a lack of hard news out, and little new
Chinese interest," said Charlie Sernatinger of ED&F Man
Capital. "The Chinese were said to have bought a cargo of beans out
of Argentina for August, and a new crop cargo out of Brazil... but
little from the U.S."
INSIGHTS
Snapped Streak: After declining for 10 weeks, U.S. ethanol
inventories rose 456,000 barrels in the past week, settling at
20.62 million barrels, according to the EIA. Last week, ethanol
inventories fell to their lowest level since January 2017.
Meanwhile, daily ethanol production is still growing in the U.S.
after the coronavirus crisis forced many plants to shutter in the
spring, with daily production increasing 14,000 barrels to 914,000
barrels per day - the highest level since late March. Corn futures
on the CBOT showed little reaction to the ethanol data
Wednesday.
No Appetite: Export sales of wheat are expected to remain puny
this week, according to grains traders surveyed by The Wall Street
Journal. Traders project sales for the week ending July 2 at
anywhere from 200,000 metric tons to 550,000 tons. By comparison,
wheat export sales totaled 489,300 tons in last week's report.
Meanwhile, corn sales are projected at anywhere from 500,000 tons
to 950,000 tons and soybean sales are projected at 800,000 tons to
1.4 million tons.
AHEAD:
--The USDA will release its latest weekly export sales numbers
at 8:30 a.m. ET Thursday.
--The USDA will release its monthly WASDE report at noon ET
Friday.
--The CFTC releases its weekly commitment of traders report at
3:30 p.m. ET Friday.
(END) Dow Jones Newswires
July 08, 2020 15:34 ET (19:34 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.