Wheat Rebounds on Higher Buying Interest
-- Wheat for March delivery rose 2% to $5.88 1/2 a bushel on the
Chicago Board of Trade Wednesday, with grains traders taking the
opportunity to restock their grain inventories after the recent dip
in wheat prices.
-- Corn for March delivery rose 0.7% to $4.23 3/4 a bushel.
-- Soybeans for January delivery fell 0.8% to $11.53 a
Running Low: Wheat futures trading on the CBOT have bounced back
after shedding 5% in the past two days. Buying interest among end
users have returned amid indications of lacking supplies.
"Many of our mills were hand-to-mouth on supplies and are
anxious to buy the breaks," said Arlan Suderman of StoneX. "We're
seeing end-user buying return to the market, taking advantage of
the recent break in prices."
Chinese Interest: In addition to domestic end-user interest,
increased export market interest served to boost both wheat and
corn futures Wednesday. Market speculation that China plans on
buying more exports of corn and wheat is a united factor driving
both contracts up.
"Rumors abound that China has secured as much as 1 million
metric tons of U.S. April corn while also asking for offers on U.S.
HRW/White wheat," said AgResource.
Traders will eagerly await confirmation from the USDA Thursday
or Friday morning to confirm if such buying has panned out.
Cashing Out: CBOT soybean futures fell overnight and through
trading Wednesday, driven in part by wetter weather in South
America as well as year-end profit-taking by managed money
"Funds have made some pretty good money in the soybean market
over the past couple of months and we would not be surprised to see
them book some of those to defend their performance for the year,"
said Tomm Pfitzenmaier of Summit Commodity Brokerage.
Meanwhile, Brazilian soybean planting progress doesn't seem to
have slowed down because of the incessant dryness in planting
regions, with 83% of the soybean crop planted, only one point off
from the previous year.
Holiday Week: Export sales of U.S. grains are expected to be
down from the previous week, due to it being a holiday week last
week, said Brian Pullam of Linn Group.
"It was a holiday-shortened week last week, so sales may trend a
little to the lower side of estimates," said Mr. Pullam.
According to grains traders surveyed by The Wall Street Journal,
corn exports are expected to be anywhere from 800,000 metric tons
to 1.3 million tons, while soybean exports are forecast between
400,000 tons and 1.15 million tons. The low end of both forecasts
are down from the previous week.
Keeping Status Quo: The phase one trade agreement looks to stay
in place following the inauguration of President-elect Joe Biden,
at least in the short term. Speaking to the New York Times, Mr.
Biden said his administration won't immediately roll back tariffs
or alter the terms of the current trade deal between the U.S. and
China, adding the U.S. needs to "regain leverage" to bring to
As it stands, China is behind on its promised agricultural
purchases, leaving grains traders eyeing how the incoming president
will address this.
Barrel Buildup: U.S. ethanol inventories are at their highest
level since mid-June, according to data from the EIA. Inventory
rose 374,000 barrels to 21.24 million barrels.
Meanwhile, ethanol production fell 16,000 barrels per day, down
to 974,000 barrels per day, a disappointment for corn traders
hoping to see a recovery in ethanol usage continuing despite the
resurgence of coronavirus this fall.
"Note production is off from 990,000 posted last week, which hit
its highest level since when energy demand destruction
significantly increased back in late March 2020," said Terry Reilly
of Futures International.
-- The USDA is scheduled to release its latest weekly export
sales at 8:30 a.m. EST Thursday.
-- The CFTC is due to release its weekly commitments of traders
report at 3:30 p.m. EST Friday.
-- The USDA is scheduled to release weekly grain export
inspections data at 11 a.m. EST Monday.
-- The USDA is due to release the weekly crop progress report
for the 2020-21 crop at 4 p.m. EST Monday.
Write to Kirk Maltais at firstname.lastname@example.org
(END) Dow Jones Newswires
December 02, 2020 15:38 ET (20:38 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.