Soybeans Rise as Dry Weather Threatens Supply
By Kirk Maltais
--Soybeans for November delivery rose 1.1% to $9.06 1/4 a bushel
on the Chicago Board of Trade Monday, as foreign buyers appear to
be purchasing more U.S. exports in expectation of extended dryness
hurting crop yields.
--Corn for December delivery rose 0.8% to $3.56 1/4 a
--Wheat for September delivery rose 0.3% to $4.93 1/4 a
Scorched Earth: Higher temperatures in the U.S. Corn Belt are
expected to pressure growing crops in the region, which is in turn
propelled CBOT grain futures higher. "Parts of the U.S. are
expected to experience well-above-normal temperatures...which is a
concern, especially if temperatures do not recede at night to give
the crop a chance to rest," said Karl Setzer of AgriVisor. Isolated
showers are expected in the region this week, but may not be enough
to quench dry soils developing, said John Baranick of agricultural
weather firm DTN.
Hedging Bets: Even though dry weather prospects kicked futures
up Monday, uncertainty about how weather may look in the latter
half of the week kept a lid on that movement--with the possibility
of scattered rainfall unwinding recent bullishness. "No trader
wants to be caught buying the bulge ahead of green blobs on the
radar screen," said AgResource. "The forecasts are not wet enough
for the bears or hot enough for the bulls."
Beat The Heat: The USDA said Monday that 264,000 metric tons of
soybeans have been sold to China for the 2019/20 marketing year,
the first notice of sales over 100,000 tons to China since June 26.
Additionally, 204,000 tons of corn were sold to China for 2020/21,
and 182,800 tons of corn were sold to Mexico. Anticipation of
hotter temperatures causing increased crop losses and raising
prices may be motivating export sales, according to traders. "There
is more awareness of potential hot-dry issues coming in the U.S.
crop belt," said Michael Zuzolo of Global Commodity Analytics.
Export Inspections Rise: Export inspections for U.S. soybeans
are at their highest level since the week of May 7, the USDA said
Monday. Soybean export inspections totaled 19.2 million bushels,
well up from the previous week's figure of 12.3 million bushels.
Combined with Monday's reports of new soybean export sales to
China, the new indications of near-term export market demand may
give soybean futures a lift this week.
--The EIA releases its weekly update on ethanol production and
inventories at 10:30 a.m. ET Wednesday.
--The USDA will release its latest weekly export sales numbers
at 8:30 a.m. ET Thursday.
--The USDA will release its monthly WASDE report at noon ET
--The CFTC releases its weekly commitment of traders report at
3:30 p.m. ET Friday.
(END) Dow Jones Newswires
July 06, 2020 15:43 ET (19:43 GMT)
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