Wheat Futures Give Back Gains; Export Sales Exceed Expectations
By Kirk Maltais
--Wheat for December delivery fell 1.3% to $5.70 1/4 a bushel on
the Chicago Board of Trade on Thursday after rising 5.2% in the
previous session, as world wheat prices stayed stable.
--Soybeans for November delivery were unchanged at $10.23 1/2 a
--Corn for December delivery rose 1% to $3.82 3/4 a bushel.
Open Question: Traders pulled back after Wednesday's rally, with
the wheat market questioning what it knows about the Russian crop.
The previous session was dominated by speculation about dry weather
in Russia. "Wheat will be volatile as the trade is rightfully
uncertain how to forecast 2021 Russian production," AgResource
Burning Oil: CBOT soybean oil futures took a hit as U.S. crude
oil futures fell 3.7% to just under $39 a barrel. A group of 10
investment banks polled by The Wall Street Journal forecast that
U.S. benchmark West Texas Intermediate futures would average $50.31
a barrel in the fourth quarter of 2021, below pre-coronavirus
levels topping $60 a barrel. Vegetable oil prices tend to move with
petroleum, making this negative for the future of soybean oil
prices. Soybean oil for December delivery finished 2.1% lower at
32.42 cents a pound.
Foreign Buying: U.S. export sales of grains exceeded grain
traders' expectations across the board, driven largely by sales to
China, Mexico and unknown destinations. Wheat sales totaled 506,300
metric tons, corn sales totaled 2.03 million tons, and soybean
sales totaled 2.59 million tons, according to data from the USDA
released Thursday. "The report was seen supportive all around,"
said Terry Reilly of Futures International.
Dry as a Bone: Drought concerns in crop-growing areas of South
America has grains traders eyeing an opportunity for U.S. exports
to increase their market share. "Any weather issues in South
America (La Nina) or the U.S. in the spring could send corn into
the $4s [per bushel] across the board," said Craig Turner of
Daniels Trading. "Add in more demand from China and corn is a very
interesting market." Soils are dry in countries such as Brazil and
Argentina. If they don't get rain, then large crops expected there
will be diminished, leaving room for U.S. crops on the export
Supply Chain: Rail shipments of U.S. grains are up from last
week and higher than this time last year, according to USDA data.
U.S. Class I railroads originated 22,130 grain carloads during the
week ended Sept. 19, a 3% increase from the previous week and 16%
more than last year, in the weekly grain transportation report
released Thursday. Barge shipments of grains are also higher for
the week, although are still down for the year, according to the
USDA. For U.S. grains, the higher shipments could bolster
speculation about rising livestock-feed demand, which could boost
--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 firstname.lastname@example.org
(END) Dow Jones Newswires
October 01, 2020 15:48 ET (19:48 GMT)
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