Soybean Futures Rise As Traders Buy The Dip
By Kirk Maltais
--Soybeans for January delivery rose 1.3% to $11.68 1/4 a bushel
on the Chicago Board of Trade on Thursday, with grains traders
trying to take advantage of a three-day losing streak to buy beans
contracts on the cheap.
--Corn for March delivery rose 0.7% to $4.26 1/2 a bushel.
--Wheat for March delivery fell 0.7% to $5.84 1/2 a bushel.
Snappin' Up Soy: While traders bought the dip in soybeans,
fundamentals are seen as running thin. "The bull market may not be
over for soybeans, but the bull is getting hungry for fresh fodder,
which we may not have for several weeks," said Arlan Suderman of
StoneX. Dry weather in Brazilian growing areas has been pushing
soybean futures higher in recent weeks, but prices have repeatedly
failed to break above $12 a bushel.
Onerous Supply: Wheat futures turned lower after Wednesday's
gains. Even with hopes that China would purchase U.S. wheat on the
export market and weather issues in key growing areas, wheat
futures are being pressured by fears of a glut. "It will take a
major production issue this winter in Russia or the U.S. in order
to help tighten stocks in a significant way," said RJO Futures. In
its November WASDE, the USDA forecast world ending stocks of wheat
at 321.5 million metric tons, up from 300.8 million tons last year.
RJO said wheat's most-active contract is likely in a downtrend and
advised traders to sell into any rallies.
Poor Showing: U.S. soybean exports slid to a marketing-year low
in the past week, according to USDA data. Soybean sales totaled
406,900 metric tons for the week ended Nov. 26, which is down 47%
from the previous week and down 68% from the prior four-week
average. The main driver is a cancellation of 539,100 tons that
were previously sold to unknown destinations. The total is on the
low end of estimates provided to The Wall Street Journal this week,
with grains traders expecting anywhere from 400,000 tons to 1.15
million tons for the shortened week.
Life Jacket: The USDA says net farm income is likely to jump 43%
to $119.6 billion this year. While higher prices for crops like
soybeans helped elevate farmer income, an increase in government
payments contributed to the gain. Government aid totaled $46.5
billion, more than double the previous year's, propelled by
coronavirus and trade assistance payments.
Turning It Around: REX American Resources saw an uptick in its
ethanol sales for its fiscal third quarter, due mostly to 57%
growth in gallons sold. The company operates six ethanol facilities
nationwide, and its revenue in the sector rose to $124.2 million
from $86.6 million for the same quarter last year. The growth came
as ethanol sales recovered from the coronavirus pandemic's
destruction of fuel demand. As of Oct. 31, ethanol production was
estimated at 961,000 barrels a day, up 30,000 barrels from its rate
as of July 31.
--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
December 03, 2020 16:05 ET (21:05 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.