Corn Rises as Traders Stay Cautious Following WASDE
August 12 2020 - 3:47PM
Dow Jones News
By Kirk Maltais
-- Corn for December delivery rose 1.2% to $3.27 1/4 a bushel on
the Chicago Board of Trade Wednesday, with grains traders waiting
to sell off of bearish WASDE data until more is known about this
week's Midwest wind storm.
--Soybeans for November delivery rose 1.1% to $8.83 a
bushel.
--Wheat for September delivery fell 0.8% to $4.91 1/4 a
bushel.
HIGHLIGHTS
Something In The Wind: Although the data released by the USDA in
Monday's WASDE largely exceeded the expectations of analysts
surveyed by The Wall Street Journal, grain futures trading on the
CBOT were largely unmoved following the report's release. For
corn--which the USDA projected higher yield and production in than
analysts had--better assessments of crop damage due to wind storms
in the Midwest this week are keeping traders on the sidelines. "A
quiet reaction to the numbers with the market apparently wanting to
assess the damage across Iowa before dropping to new lows for
corn," said Doug Bergman of RCM Alternatives.
Wilting Wheat: The USDA cut its expectations for world wheat
production by roughly 3 million metric tons in its WASDE report,
but sees global consumption dropping as well--causing world ending
stocks to rise roughly 2 million tons from the agency's previous
projection in July. The news is bearish for wheat traders, keeping
most-active wheat futures underwater Wednesday. "This leaves us
where we were before the report-seeking demand on the world stage,"
said Michael Zuzolo of Global Commodity Analytics.
INSIGHTS
Beijing Buying Streak: China was again in the market for U.S.
soybeans exports, the USDA confirmed Wednesday. It is the fifth day
in a row that China has purchased U.S. soybean exports, with the
USDA confirming that China bought 258,000 metric tons for delivery
in the 2020/21 marketing year. Additionally, 120,000 tons of
soybeans were sold to unknown destinations for delivery in 2020/21.
Over the course of the past five days, the USDA confirmed that 1.56
million tons of soybeans have been sold to China, supporting
optimism among traders that U.S./China tensions may not translate
into a falloff of Chinese export purchasing.
Not So Fast: Production of fuel ethanol in the U.S. again
dropped this week, according to data released by the EIA. Daily
production of ethanol totaled 918,000 barrels, down 13,000 barrels
per day from last week. Grains traders had expected an uptick, said
Terry Reilly of Futures International. "The ethanol data was
perceived to be bearish for U.S. corn futures," he added. The
uptick of Covid-19 cases in the U.S. may be contributing to less
gasoline consumption by consumers--although ethanol inventories
fell by 596,000 barrels in the past week, totaling 19.75 million
barrels. That's the lowest inventories have been since December
2016.
AHEAD:
--The USDA will release its latest weekly export sales numbers
at 8:30 a.m. ET Thursday.
--The CFTC releases its weekly commitment of traders report at
3:30 p.m. ET Friday.
--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.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
August 12, 2020 15:32 ET (19:32 GMT)
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