Corn Rises as Farmers Hold on to Harvests -- Daily Grain Highlights
October 15 2021 - 04:03PM
Dow Jones News
By Kirk Maltais
-- Corn for December delivery rose 1.7% to $5.25 3/4 a bushel on
the Chicago Board of Trade Friday as trader attention turns to
stronger demand and a reluctance by farmers to sell into cash
markets.
-- Wheat for December delivery rose 1.3% to $7.34 a bushel.
-- Soybeans for November delivery rose 1% to $12.17 3/4 a
bushel.
HIGHLIGHTS
Demand Deluge: Demand is the main driver for CBOT grain futures
Friday. More specifically, farmers appear to be holding off on
selling their harvested crop into the market.
"U.S./world farmers have disengaged from new cash sales as
profit margins of world soy crushers, ethanol producers, and even
livestock producers soar," said AgResource. "The primary reason for
the risk of higher CBOT prices is 'demand'."
Hit the Brakes: The U.S. grain harvest has progressed this year
faster than other years, but traders anticipate a hurdle this
weekend via rainfall sweeping through the U.S.
"A system moving through the region will bring moderate rainfall
and potential for severe weather across southeastern areas into
early Saturday before leaving," said DTN about rainfall moving
through the Midwest. "Widespread moderate rain recently has caused
delays for corn and soybean harvest and will take some time to dry
out as temperatures cool back closer to normal through next
week."
Earlier this week, the USDA reported that the U.S. corn harvest
is 41% complete and soybeans are 49% complete.
Chinese Interest: The USDA announced a new round of flash sales
of grains Friday morning, saying that 396,000 metric tons of
soybeans have been sold to unknown destinations for the 2021-22
marketing year, in addition to 132,000 tons of soybeans sold to
China for 2021-22.
Grain traders have been watching for China to announce new
purchases in response to the recent decline in prices following
Tuesday's WASDE report from the USDA.
"Beans were up all session long, pushed up by a big Chinese boat
trade yesterday," said Charlie Sernatinger of ED&F Man
Capital.
INSIGHTS
Tight Budgets: The sky-high costs for fertilizer -- driven by
higher energy prices and shortages of certain ingredients -- are
expected to be a factor limiting row crop planting in the next crop
year.
"There are a lot of ideas that production and planted and
harvested area will be significantly less next year due to the lack
of fertilizers available and the cost of production," said Jack
Scoville of Price Futures Group.
Slower Rate: Soybeans crushed in the U.S. for the month of
September are down from the previous month's rate, according to the
latest report for the National Oilseed Processors Association. NOPA
pegged the rate of soybeans crushed through September 2021 at 153.8
million bushels, which is down from 158.8 million bushels in August
and 161.5 million bushels at the same time last year. Demand has
become a bigger topic for grains markets this month, but the lesser
crush rate didn't spark strong movement in soybeans.
"The complex is holding on to gains overall," said Matt Zeller
of StoneX. "Crush and oil stocks a bit bearish this month but
strong domestic meal usage remains."
AHEAD
-- The USDA is scheduled to release its weekly export
inspections report at 11 a.m. EDT Monday.
-- The USDA is due to release its weekly crop progress report at
4 p.m. EDT Monday.
-- The EIA is scheduled to release its weekly ethanol production
and stocks report at 10:30 a.m. EDT Wednesday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
October 15, 2021 15:48 ET (19:48 GMT)
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