Wheat Down For Fourth Straight Session
By Kirk Maltais
--Wheat for December delivery fell 0.8% to $6.03 3/4 a bushel on
the Chicago Board of Trade Thursday in reaction to more rain in
major wheat-growing areas in the U.S. and Russia.
--Corn for December delivery fell 0.8% to $3.98 1/2 a
--Soybeans for January delivery fell 0.4% to $10.50 1/2 a
Quenching the Crops: Precipitation in the U.S. Plains and Russia
pressured CBOT wheat futures Thursday, marking the fourth
consecutive session that wheat lost ground. "Showers are more
promising Friday through the weekend as a system gets cut-off and
meanders in the area," agricultural weather firm DTN said.
All About The Fundamentals: Even though they finished lower,
grains futures fared better in afternoon trading than they did this
morning. Managed money funds were the main driver of sales for much
of the week ahead of the U.S. presidential election, but today fund
traders are said to have taken their foot off of the brakes. "Fund
liquidation dominated early amid another round of weakness in
global energy markets, but strong U.S. and global grain
fundamentals have offered support," said AgResource. "U.S. corn is
the world's cheapest feedgrain, U.S. soybeans are virtually the
only supply available to world importers through mid-Feb, and even
wheat export demand has held steady despite lofty premiums to E.U.
and Black Sea origin."
Still Got To Eat: Grain futures could be in for a shock in the
short term if President Trump pulls off a victory over challenger
Joe Biden next week. "If Trump pulls the chestnuts out of the fire,
we probably get a short-term break as the market feels there is
political risk to the export market again," said Charlie
Sernatinger of ED&F Man Capital. However, prices are expected
to be stable longer-term, based on the assumption that countries
buying U.S. grain exports won't drastically change their buying
programs depending on who wins. "Either way we look at it, everyone
needs to eat, so we don't expect election results to change the
current U.S. export demand landscape," said Terry Reilly of Futures
Cautious Traders: If Biden prevails come Election Day next week,
then grains traders may become concerned that a Biden
Administration may impact domestic corn demand. "The spring
shutdown of the economy slashed ethanol demand by 50% at the time,
and we are still paying the price for that," said Arlan Suderman of
StoneX. "Trump has stated that he will not do that again, while
Biden has hinted that he might, and that has the corn and ethanol
industry very nervous."
Beating the Forecast: Export sales of both U.S. corn and wheat
exceeded the forecasts of grains traders surveyed by The Wall
Street Journal this week - possibly a good sign for the appetite of
the export market for U.S. product. Sales of wheat totaled 743,200
metric tons for the week ending Oct. 22, while sales of corn
totaled 2.24 million tons. For both, these figures are well up from
the prior 4-week average, and also higher than trader forecasts -
particularly corn, which was estimated to total 1 million tons to
1.5 million tons by traders. Meanwhile, soybean sales totaled 1.62
million tons, down 35% from the prior 4-week average but within
trader expectations as sales to China have dropped off in recent
--The USDA will release its monthly agricultural prices report
at 3 p.m. ET Friday.
--The CFTC releases its weekly commitment of traders report at
3:30 p.m. ET Friday.
Write to Kirk Maltais at firstname.lastname@example.org
(END) Dow Jones Newswires
October 29, 2020 15:53 ET (19:53 GMT)
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