Wheat Drops as Downward Trend Continues
August 06 2020 - 4:12PM
Dow Jones News
By Kirk Maltais
-- Wheat for September delivery fell 1.9% to $5.01 1/4 a bushel
on the Chicago Board of Trade Thursday on improving Russian yields
and consistently good U.S. weather.
--Soybeans for November delivery fell 0.1% to $8.78 a
bushel.
--Corn for December delivery rose 0.2% to $3.23 3/4 a
bushel.
HIGHLIGHTS
Downhill Slide: After a brief respite yesterday, wheat futures
fell for the third CBOT trading session of the last four. Wheat
futures slid to the lowest levels since July 8. News of
larger-than-expected wheat crops out of areas like Russia have been
pressuring wheat. "The market is a bit oversold but the short-term
trend is down," RJO Futures said. "The trend may continue down
without lots of help from outside markets."
How Big is Big?: Grains traders are getting their books in order
ahead of next week's WASDE report, said AgResource. "Traders are
discussing how big is big in terms of U.S. corn/soy yields, but the
bears would like to see a soaking rain across Iowa before they lean
into a larger net short corn position," says the firm. Corn and
soybean futures are showing slight moves in trading Thursday. The
monthly WASDE report will be released by the USDA next Wednesday at
noon eastern time.
INSIGHTS
Sunny Disposition: Weather in crop-growing areas of the U.S. has
supported corn and soybeans. "Overall sentiment remains bearish due
to favorable U.S. weather conditions, suggesting ample corn and
soybean crops to come," said AgriTel. According to agricultural
research firm DTN, "most areas are in favorable conditions," for
developing corn and soybean crops in the Midwest.
Coming Up Short: U.S. agricultural exports to China jumped in
June, but overall, China is still behind on the level of buying it
needs to be at in order to meet its phase one trade deal
obligations, said Panjiva, the supply chain research unit of
S&P Global Market Intelligence. US agricultural exports to
China in June are up 156.9% compared to 2017 - the baseline year
for the deal's commitments. However, it's still not enough, says
the firm. "Both energy and agriculture have only increased recently
however and year-to-date both are still well behind schedule,"
Panjiva said.
Wilted Hopes: Crop seed suppliers like Corteva headed into the
spring with the wind at their backs as farmers planned for 97
million acres of corn -- typically seed makers' most profitable
crop. But the pandemic and other factors cooled farmers on that
plan, said Corteva CEO Jim Collins, as corn prices fell. Farmers
ultimately planted 92 million acres of corn, which helped lead to a
6% decline in Corteva's 2Q North American seed sales. For the
former DowDuPont unit, every 1 million acres of corn planted
represents $20 million in operating profit.
AHEAD:
--The CFTC releases its weekly commitment of traders report at
3:30 p.m. ET Friday.
--The USDA releases its weekly grain export inspections data at
11 a.m. ET Monday.
--The USDA releases its weekly crop progress report for the
2020/21 crop at 4 p.m. ET Monday.
Jacob Bunge contributed to this article.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
August 06, 2020 15:57 ET (19:57 GMT)
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