Corn Rises to 7-Year High as WASDE Rally Continues
By Kirk Maltais
--Corn for March delivery rose 1.4% to $5.24 1/2 a bushel on the
Chicago Board of Trade Wednesday as yesterday's data from the USDA
fueled a rally.
--Wheat for March delivery fell 0.7% to $6.60 1/2 a bushel.
--Soybeans for March delivery fell 0.9% to $14.06 1/4 a
Corn Pops: After closing limit-up yesterday, corn futures on the
CBOT maintained upward momentum today. The main driver continues to
be yesterday's USDA data showing corn ending stocks falling to
their lowest level in 7 years. "The USDA had already been expected
to paint a tighter picture of the situation on the grain and
oilseed markets in its latest forecasts, but the extent of the
adjustments has come as a surprise nonetheless," said Commerzbank.
The continuing climb brings corn prices to their highest levels
Hung Over: While corn futures extended their rally Wednesday,
wheat and soybeans took a pause. "The USDA January Crop Report has
passed, and the entire world has now been able to react to its
bullish data," said AgResource. "This produced a short-term
hangover as the market awaits new evidence that lofty prices are
rationing demand." The firm says grain markets often take breaks
like this before "pushing to new highs."
Tight Squeeze: The USDA confirmed a new flash sale of soybeans
Wednesday morning - with 464,300 metric tons sold to unknown
destinations. Of that, 396,300 tons are being delivered in the
2020/21 marketing year, while the remainder is being delivered in
2021/22. The large delivery comes as talk about demand rationing
remains strong among grains traders, after yesterday's WASDE showed
US ending stocks growing smaller. "With China still actively
looking to buy U.S. beans and crushers still operating with
positive margins, prices still need to go higher to slow demand,"
said Doug Bergman of RCM Alternatives.
Rising Tide: The prospects for the U.S. ethanol industry in 2021
are largely hinged on how promptly the US disseminates coronavirus
vaccine and-- as the pandemic ends--how soon consumers begin to
travel freely again. However, until then, the U.S. ethanol industry
remains underwater - with inventories rising another 408,000
barrels to 23.69 million barrels this week. That's the highest
they've been since early May last year. Even so, the agricultural
market is optimistic that U.S. ethanol will bounce back this year.
"For our clients, for the first time in awhile, there's a bullish
sentiment among them," said Brian Philpot, CEO of AgAmerica
Picking Up Steam: After a down holiday week, grain export sales
are expected to start picking up slightly from last week, according
to grain traders surveyed by The Wall Street Journal. For the week
ending January 7, soybean exports are predicted to total anywhere
from 300,000 tons to 1.2 million tons, after posting sales of only
a mere 116,800 metric tons last week. Meanwhile, corn sales are
expected to stay consistent, with anywhere from 700,000 tons to 1.2
million tons predicted. While sales recover, grain prices have been
on the rise - with corn, wheat, and soybeans finding multi-year
highs this week.
--The USDA will release its weekly export sales report at 8:30
a.m. ET Thursday.
--The CFTC will release its weekly commitment of traders report
at 3:30 p.m. ET Friday.
--The Chicago Board of Trade will be closed on Monday in
observance of Martin Luther King Jr. Day. It will reopen
Write to Kirk Maltais at email@example.com
(END) Dow Jones Newswires
January 13, 2021 15:30 ET (20:30 GMT)
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