Soybeans Up Amid South American Supply Questions
By Kirk Maltais
--Soybeans for November delivery rose 0.8% to $4.05 1/4 a bushel
on the Chicago Board of Trade Tuesday on speculation that dry
weather in South America may lead to a decrease in the regions'
--Corn for December delivery rose 0.4% to $10.54 1/4 a
--Wheat for December delivery rose 0.3% to $6.27 a bushel.
Delayed Reaction: Soybean futures on the CBOT were driven in
large part by both South American planting delays as well as strong
export sales in the U.S., said Tomm Pfitzenmaier of Summit
Commodity Brokerage. "But as long as there are weather concerns in
South America and as long as China continues to buy U.S. beans, the
bulls will continue to control the soybean market," said Mr.
Pfitzenmaier. Dry conditions in countries like Argentina and Brazil
could lessen expected yields for soybean crops there.
Sudan's Wheat Needs: U.S. wheat futures rose Tuesday in reaction
to a Reuters report that the U.S. is working with Sudan to finance
a shipment of 1 million metric tons of U.S. wheat to Sudan. "The
U.S.-Sudan financing is being worked on with the country mired in
an economic crisis that is causing acute food shortages," says
AgResource. "The financial 'ask' by Sudan is unlikely to reach 1
million tons of wheat, but any demand from this African nation
would be welcomed."
Weather? Meh! "U.S. weather is losing its influence on the
commodity market," said Karl Setzer of AgriVisor, while he also
notes that conditions are still being monitored. Setzer says
weather is taking a backseat due to the advanced pace of the U.S.
grains harvest. According to the USDA's latest crop progress report
released late yesterday, the U.S. corn harvest is 60% complete
versus a five-year average of 43%. The soybean harvest is 75% done
versus a 5-year average of 58% -- nevertheless, grains futures on
the CBOT closed higher Tuesday.
Tight Squeeze: China's rising corn prices due to dry weather
affecting domestic crops may not necessarily lead to a jump in the
country's corn imports, said Darin Friedrichs of StoneX. "If it's
30 million tons, that doesn't mean the government is going to
suddenly import 30 million tons to fill that shortfall. It could
just let the market work." He notes that if prices in China remain
very elevated then it will squeeze some industrial users who will
then reduce consumption. Dalian Commodity Exchange front-month corn
traded higher at CNY2,652 a metric ton Tuesday.
--The EIA releases its weekly update on ethanol production and
inventories at 10:30 a.m. ET Wednesday.
--Ethanol producer and oil refiner Valero Energy Corp. will
release third-quarter earnings before the stock market opens on
--The USDA will release its latest weekly export sales numbers
at 8:30 a.m. ET Thursday.
--The USDA will release its monthly cold storage report at 3
p.m. ET Thursday.
--The USDA will release its monthly livestock slaughter report
at 3 p.m. ET Thursday.
Lucy Craymer contributed to this article.
Write to Kirk Maltais at Kirk.Maltais@WSJ.com
(END) Dow Jones Newswires
October 20, 2020 15:57 ET (19:57 GMT)
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