Corn Higher on Strong Spot Demand - Daily Grain Highlights
October 18 2021 - 3:38PM
Dow Jones News
By Kirk Maltais
--Corn for December delivery rose 1.3% to $5.32 3/4 a bushel on
the Chicago Board of Trade Monday. Spot market demand for corn was
high while farmers are reluctant to sell their freshly harvested
crops.
--Wheat for December delivery rose 0.3% to $7.36 1/4 a
bushel.
--Soybeans for November delivery rose 0.3% to $12.21 1/2 a
bushel.
HIGHLIGHTS
Fuel Frenzy: Corn futures led the CBOT higher by the close of
Monday's session due in part to strong demand from industries like
ethanol. "The spot processing margin is as high as 50 cents a
gallon positive, which, in terms of cents per bushel, looks like it
works out to around $1.35, more or less," said Charlie Sernatinger
of ED&F Man Capital. "That is serious jack for an industry that
was on its heels through much of the pandemic, and it has the
processors out west bidding up hard for spot corn, and staying
open, even when they are more or less plugged."
Fertilizer Factor: Crude oil prices rose Monday, providing
support for grain futures throughout the day. "There is increasing
chatter that high energy prices could ultimately limit fertilizer
production, leaving Ag markets vulnerable," said Robert Yawger of
Mizuho Securities USA. Today, crude oil futures closed up 0.2% to
roughly $82.44 per barrel, making it 10.6% that oil prices have
risen since the start of the month. Higher fertilizer prices are
expected to impact the planting decisions made by U.S. farmers
ahead of the next planting season.
INSIGHTS
It's Fundamental: Supply-and-demand fundamentals look to
ultimately drive wheat prices higher as the week progresses. "Wheat
still looks the best technically, supplies held by major exporters
are tight, and demand continues to show up via international
tenders," said Doug Bergman of RCM Alternatives. High prices were a
factor causing Egypt - one of the biggest buyers of wheat exports
globally - to cancel a previously-announced tender last week. Even
so, available supplies for large wheat consumers appear to be
dwindling, forcing them to buy higher-priced spot market
material.
Back to the Grind: Export inspections of U.S. corn and soybeans
have jumped, according to USDA data. In its latest weekly grain
export inspections report, the USDA said that inspections of U.S.
corn for the week ended October 14 totaled 976,218 metric tons, up
from 842,848 tons last week. Meanwhile, soybean inspections totaled
2.3 million tons, up from 1.74 million tons in the previous week.
Wheat inspections were low this week, at a paltry 139,753 tons.
Traders today were keenly eyeing this week's report, as an
indicator of where demand for U.S. grains on the export market
currently stand.
AHEAD:
--The EIA will release its weekly ethanol production and stocks
report at 10:30 a.m. ET Wednesday.
--The USDA will release its weekly export sales report at 8:30
a.m ET Thursday.
--The USDA will release its monthly livestock slaughter report
at 3 p.m. ET Thursday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
October 18, 2021 15:23 ET (19:23 GMT)
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