Wheat Higher on Tighter Global Supply -- Daily Grain Highlights

By Kirk Maltais

--Wheat for December delivery rose 1.7% to $7.72 1/2 a bushel on the Chicago Board of Trade Thursday in reaction to indications of tight supplies globally.

--Corn for December delivery rose 1% to $5.62 3/4 a bushel.

--Soybeans for January delivery fell 0.2% at $12.46 a bushel.

HIGHLIGHTS

Supply Shortfall: Wheat futures are leading the CBOT grains complex higher Thursday in response to inflation concerns as well as global supply issues. "Global quality milling wheat supplies remain tight among the major exporters," said Arlan Suderman of StoneX. "Many mills still need to buy on price pull backs. This market will remain tight until global supplies can be rebuilt." Weather issues have been a factor limiting winter wheat planting globally.

Inflation Sensation: Agricultural futures are the beneficiary of investor's interest in commodities as an inflation hedge. "Speculators keep talking about inflation and are buying commodities for an inflation trade," said Jack Scoville of Price Futures Group. The European Central Bank said today it would keep its large monetary stimulus unchanged, delaying a decision on whether to phase out easy money in response to surging inflation as global supply-chain bottlenecks and shortages weigh on the area's recovery.

INSIGHTS

Better Availability: The reluctance of U.S. farmers to sell their new corn crop to end market users has subsided, supporting the elevated production of ethanol in recent weeks. "The industry is in a much better position than they were one month, two months ago," said Geoff Cooper, head of the Renewable Fuels Association. "This harvest coming in is a big crop, and we're seeing that with ethanol production numbers." Even with farmers being more willing to sell their freshly-harvested crops instead of holding out for higher prices, general strength in energy markets are supporting prices for both ethanol and corn. In its most recent progress report, the USDA said the US corn harvest is 66% complete.

Season Underway: With the U.S. soybean harvest nearing completion, grain traders are turning their attention to what's happening with South America's growing season. Earlier this week, agricultural consultancy AgRural reported that Brazilian farmers had sown 38% of the estimated planted area with the oilseeds as of Oct. 21, up from 22% a week earlier and compared with 23% on the same date last year. "For the most part, weather conditions in South America are much more favorable than last year, especially in central and southern Brazil and Argentina, although Argentina is starting to show drier soils developing," said Karl Setzer of AgriVisor. "Even with localized weather issues, trade is expecting to see larger crops in Brazil than last year."

Looking Ahead: Traders are turning their attention to the USDA's next WASDE report - which is due out to November 9. "Traders are discussing the potential that U.S. corn/soybean yields will rise in the November NASS crop report with the soybean yield in particular reaching above 52 bushels per acre," said AgResource. "The bears will clutch to this report as the U.S. harvest tries to push across the finish line." According to the USDA's latest crop progress report, the corn and soybean harvests are over 2/3rds complete.

AHEAD:

--The USDA will release its monthly agricultural prices report at 3 p.m. ET Friday.

--The CFTC will release its weekly commitment of traders report at 3:30 p.m. ET Friday.

--The USDA will release its weekly export inspections report at 11 a.m. ET Monday.

--The USDA will release its monthly grain crushings report at 3 p.m. ET Monday.

--The USDA will release its weekly crop progress report at 4 p.m. ET Monday.

Write to Kirk Maltais at kirk.maltais@wsj.com

(END) Dow Jones Newswires

October 28, 2021 15:29 ET (19:29 GMT)