By Kirk Maltais
-- Soybeans for July delivery rose 0.8% to $8.57 1/2 a bushel on
the Chicago Board of Trade Wednesday as the USDA confirmed another
export sale of U.S. soybeans this morning, boosting the market's
confidence that the phase one trade deal is still in force.
-- Wheat for July delivery rose 0.8% to $5.12 a bushel.
-- Corn for July delivery fell 0.1% to $3.24 a bushel.
Phase One Still Alive: 186,000 metric tons of U.S. soybeans have
been sold to unknown destinations, the USDA said Wednesday. Of
that, 66,000 tons are for delivery in the 2019-20 marketing year,
and the remainder are for delivery in 2020-21.
While the market would be more excited by this sale being
confirmed as going to China, the sale was positive for soybean
"U.S. beans are competitively priced into China," said Doug
Bergman, head of the agricultural trading desk for RCM
Alternatives, who forecasts soybean futures rallying to roughly
$8.75 per bushel in the near future.
Follow the Leader: Wheat futures on the CBOT rose Wednesday,
following Russian wheat futures higher.
"The Russian July fob wheat price has moved up ... amid the
coming difficult transition between an old-crop quota and a
new-crop sales system that is more state controlled," said
A rise in Russian prices allows room for U.S. wheat to move
higher since Russian wheat is one of its main competitors.
Grains traders polled by The Wall Street Journal say they expect
Thursday's USDA report to show export sales of anywhere from
150,000 metric tons to 600,000 tons. This range is lower than last
week's sales total of 706,300 tons.
Road to Recovery: Ethanol production in the U.S. continued its
rally this week, with weekly production up to 765,000 barrels per
day, up 41,000 barrels from last week, the EIA said. While still
well off from normal production for this time of year, roughly 1
million to 1.1 million barrels per day, according to data from INTL
FCStone, production has shot up considerably since finding a record
low of 537,000 barrels per day in late April.
Ethanol inventories have returned to the levels they were at to
start 2020, with stocks dipping another 700,000 barrels to 22.476
million barrels this week.
Corn futures pared morning losses after the release of the
More Bumps Ahead: News of big export purchases by China may have
sparked some buying in CBOT soybean futures, but the outlook for
futures prices remains bearish, said Georgi Slavov of Marex
"Soybean values have entered the clash zone, as in prices, do
they stay, or do they go?" said Mr. Slavov, who views world soybean
supplies as growing with demand not growing at a commensurate
"End users, farmers, commercials, and small speculators are all
on the sidelines waiting for clarity on what the new normal might
be for oilseed values," Mr. Slavov said, adding that part of price
movement currently is the market adjusting to life post-coronavirus
Happy Meal: Grains traders are expecting soymeal exports to be
up this week to as high as 650,000 metric tons, and abnormally high
The data suggest soymeal demand is on the rise, which makes
sense considering the floor soymeal prices have found in recent
days. Soymeal futures on the CBOT found a low of $281.50 per short
ton in late May, a 17.3% decline since finding a nearly two-year
high of $340.20 per ton in late March. With soymeal so cheap, it
would make sense that export buyers find it attractive.
Soymeal futures finished up 0.9% to $286.30 per short ton
-- The USDA is scheduled to release its latest weekly export
sales numbers at 8:30 a.m. EDT Thursday.
-- The CFTC is due to release its weekly commitments of traders
report at 3:30 p.m. EDT Friday.
-- The USDA is scheduled to release its weekly grain export
inspections data at 11 a.m. EDT Monday.
-- The USDA is due to release its weekly crop progress report
for the 2020/21 crop at 4 p.m. EDT Monday.
Write to Kirk Maltais at email@example.com
(END) Dow Jones Newswires
June 03, 2020 15:46 ET (19:46 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.