Wheat Lower as Rain Hits Parched Growing Areas
October 26 2020 - 3:37PM
Dow Jones News
By Kirk Maltais
--Wheat for December delivery fell 2% to $6.20 a bushel on the
Chicago Board of Trade Monday, amid reports of rainfall hitting the
U.S. Plains and Russia over the weekend into this week.
--Corn for December delivery fell 0.4% to $4.17 3/4 a
bushel.
--Soybeans for November delivery rose 0.4% to $10.87 3/4 a
bushel.
HIGHLIGHTS
Washed Away: Wheat futures trading on the CBOT led the way lower
Monday, due to rainfall coming to parched growing areas worldwide.
"[Wheat is] down overnight as Southern Plains are due to receive
good moisture and the extended forecast has rains coming for
Russia," said Marex Spectron. "We have been saying for some time
that it doesn't take much rain in order to get a crop established
pre winter, and if these rains eventuate much of the dryness story
goes away with it."
Virus Weighs Heavy: Profit taking was a main driver for grains
futures trading on the CBOT Monday, with corn and wheat down from
recent multi-year highs as traders sought to ensure gains, said
AgResource. For corn in particular, something new needs to develop
in order to launch prices higher, said the firm. "U.S. corn futures
need to confirm fresh China demand for the next rally leg," it
said. "Any Covid-19 pandemic worsening would impact corn and U.S.
ethanol on reduced U.S. driving." The seven-day average of new
coronavirus cases hit an all-time high of 68,767 cases in the U.S.
Monday, creating negativity across macro markets, including
grains.
INSIGHTS
Nearing Finish Line: Grain traders expect this afternoon's crop
progress report from the USDA to show the U.S. harvest is nearly
complete--which could put pressure on grains futures this week.
"Trade is expecting to see another jump in harvest data in
tonight's release," said Karl Setzer of AgriVisor. "Soybean harvest
is now expected to be nearly complete. Corn harvest should be near
or above 75% as attention was more on that crop as soybean harvest
winds down."
Speeding Up: Brazilian farmers had planted 23% of the area
expected to be sown, with the crop as of Oct. 22 up from 8% a week
earlier, though still behind the five-year average for the date,
according to agricultural consultancy AgRural. Dry weather in many
areas had been slowing work in the fields, but starting from
mid-October improved rain has helped speed planting. Brazil is the
world's biggest producer of soybeans and the country's crop agency
recently forecast a record harvest of 133.7 million metric tons for
the 2020-2021 growing season.
Strong Showing: Soybean futures trading on the CBOT stayed
relatively firm Monday, due in part to signs that export sales to
China are still strong. Grain export inspections for U.S. soybeans
totaled 2.66 million metric tons, with 2.02 million tons being
inspected for exporting to China. Mexico, by comparison, scored a
distant second with 103,231 tons being inspected. On Friday, the
USDA confirmed that to date, China has purchased over $23 billion
in agricultural products, which is roughly 71% of its target under
the Phase One Agreement.
AHEAD:
--Old Dominion Freight Line Inc. will release its third-quarter
earnings before the stock market opens on Tuesday.
--Kellogg Co. will release its third-quarter earnings before the
stock market opens on Wednesday.
--The EIA releases its weekly update on ethanol production and
inventories at 10:30 a.m. ET Wednesday.
--Jeffrey Lewis contributed to this article.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
October 26, 2020 15:22 ET (19:22 GMT)
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