Wheat Higher as Global Weather Watch Extends
By Kirk Maltais
--Wheat for December delivery rose 1% to $5.50 1/4 a bushel on
the Chicago Board of Trade Monday, amid reports of weather
conditions hurting the wheat harvest by competitors on the export
market such as Russia.
--Corn for December delivery rose 0.4% to $3.66 3/4 a
--Soybeans for November delivery fell 0.6% to $9.96 1/4 a
Wicked Weather: Weather events in different wheat-growing areas
of the world had U.S. wheat futures leading major grains higher
Monday. "A weekend Australian frost has damaged the Victoria and
South Australian wheat crops according to several cash sources,"
said AgResource, who says that the bushel losses from the frost are
currently unknown. Projections for Russian wheat are falling as
well. "The ongoing acute dryness has Black Sea exporters discussing
the chance that a mid-October ministry meeting could lower 2021
Russian wheat export potential under quotas," said the firm.
Proceed With Caution: Grains futures on the CBOT posted limited
movement Monday, with many traders looking ahead to the USDA's
quarterly stocks report Wednesday, which is "known for its
surprises," according to Arlan Suderman of StoneX. "The stocks
report is also expected to be accompanied by a modest reduction in
the size of last year's corn crop, while last year's soybean crop
is pushed larger by 45 million or more bushels."
Beijing Brakes: The USDA again didn't report any new flash sales
of grain exports to China, which placed pressure on CBOT soybean
futures today. The USDA did report 110,800 metric tons of corn sold
to Japan, as well as 207,140 tons of corn and 218,300 tons of
soybeans sold to unknown destinations, but the absence of China in
these figures was seen as a possible reason for fund traders to cut
large net long position in soybeans - 211,590 contracts as of the
CFTC's latest report Friday. "In the near term, the market may need
to push out more of the speculative length," said Doug Bergman of
Overflow: U.S. ethanol inventories are expected to increase this
week, said Terry Reilly of Futures International. According to Mr.
Reilly, ethanol inventories are expected to rise 50,000 to 150,000
barrels, bringing the total back over 20 million barrels for the
first time in roughly a month. For traders watching for signs of
economic recovery, an increase of inventory would suggest a
stagnation in fuel demand - bad news for corn farmers looking for a
recovery in ethanol consumption. However, daily ethanol production
is also expected to grow, by 7,000 barrels from 906,000 barrels per
day last week.
Inspections Mixed: Soybean export inspections are at their
lowest levels in roughly a month, falling to 44.5 million bushels
this week - down from 50.7 million bushels last week and their
lowest level since late August, according to USDA data. However,
soybean inspections this week are higher than their 10-week average
of 36 million bushels. Meanwhile, corn and wheat export inspections
this week exceeded their 10-week averages, at 31.8 million bushels
for corn and 20.7 million bushels for wheat, according to USDA
Yields Aplenty: Grains traders expect this afternoon's crop
progress report from the USDA to show ample progress in harvests of
corn and soybeans. "Yields are coming a little better than expected
and with rapid harvest progress over the next 10 days the pressure
on prices will likely continue," said Tomm Pfitzenmaier of Summit
--The EIA releases its weekly update on ethanol production and
inventories at 10:30 a.m. ET Wednesday.
--The USDA releases its quarterly grain stocks report at noon ET
--The USDA releases its monthly agricultural prices report at 3
p.m. ET Wednesday.
(END) Dow Jones Newswires
September 28, 2020 15:47 ET (19:47 GMT)
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