Corn Futures Drop After Marginal Cuts to Production Estimates
By Kirk Maltais
--Corn for December delivery fell 3.4% to $3.44 3/4 a bushel on
the Chicago Board of Trade on Friday, in response to the USDA's
marginal cuts to corn-production estimates.
--Soybeans for November delivery fell 1.2% to $8.90 3/4 a
--Wheat for September delivery rose 1.7% to $5.34 a bushel.
Wimpy WASDE: Friday's report contained little to change grain
traders' view of the current supply and demand situation, with
corn-production forecasts falling to 15 billion bushels and
soybean-production estimates rising to 4.16 billion bushels, pretty
much as analysts expected. "Nothing too earth-shattering in the
numbers today," said Doug Bergman of RCM Alternatives. "Weather
over the next couple weeks will be a bigger price driver than
Summer Showers: Rainfall in the U.S. Corn Belt kept grain
futures down before and after the WASDE report's release. "Very
beneficial rains fell across eastern Iowa, southern Wisconsin and
northern Illinois over the past 24 hours," said Arlan Suderman of
StoneX. "The current storm system will continue to provide rain
chances for central and eastern areas of the Midwest over the next
several days." A slowdown in the weather system's progression means
rain may linger in the area longer than previously expected, Mr.
Wheat Surprise: Grains traders reacted favorably to the USDA's
projection of lower wheat production in 2020. The WASDE forecast of
1.82 billion bushels was below analyst estimates of 1.86 billion
bushels. "The surprise of the day has to be the wheat production
numbers, which were bullish," said Charlie Sernatinger of ED&F
Beijing Buying: Chinese buyers have purchased roughly 1.69
million metric tons of grains for delivery in the 2019/20 and
2020/21 marketing years. Of that, 1.37 million tons of corn were
sold for delivery in both marketing years, 190,000 tons of hard red
spring wheat were sold for 2020/21, and 130,000 tons of hard red
winter wheat were sold for 2020/21. Even though the sale of corn to
China dwarfs the recent weekly export sales of corn overall--with
sales totaling one million tons in this week's report--grain
traders focused more on WASDE and the weather.
Phase One Forever: President Trump cast doubt on the possibility
of the next phase of trade agreements between the U.S. and China
coming to pass, citing dissatisfaction with Beijing's response to
the coronavirus outbreak in Wuhan. "They could have stopped the
plague, they could have stopped it, they didn't stop it," Trump
told reporters Friday. The U.S. and China signed the phase one deal
in January, which was touted as a partial deal while the two sides
worked on tougher issues.
--The USDA releases its weekly grain export inspections data at
11 a.m. ET Monday.
--The USDA releases its weekly crop progress report for the
2020/21 crop at 4 p.m. ET Monday.
--The EIA releases its weekly update on ethanol production and
inventories at 10:30 a.m. ET Wednesday.
Write to Kirk Maltais at email@example.com
(END) Dow Jones Newswires
July 10, 2020 15:45 ET (19:45 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.