Corn Falls as Funds Bail Out Ahead of Weekend
By Kirk Maltais
--Corn for March delivery fell 4.5% to $5.00 1/2 a bushel on the
Chicago Board of Trade Friday, dropping dramatically as managed
money investors increased profit-taking.
--Soybeans for March delivery fell 4.3% to $13.11 3/4 a
--Wheat for March delivery fell 0.4% to $6.34 1/2 a bushel.
Friday Flight: The selloff in grains accelerated Friday, with
futures turning sharply lower as managed money funds closed out
positions. Midday, funds sold 34,000 contracts of corn, 21,900
contracts of soybeans and 15,400 contracts of wheat, according to
AgResource. "The market tried to bounce off the overnight lows on
larger than expected U.S. weekly exports of summer row crops while
wheat has tried to follow," said the firm. "The volume of CBOT
trade has been massive with the charts turning lower amid this
week's inability to rally."
Underwhelmed: Export sales of U.S. grains were stronger than
traders expected, which set the market up for disappointment when
grain futures didn't rebound in response. Soybean sales totaled
2.65 million metric tons for both the 2020/21 and 2021/22 marketing
years, while corn sales totaled 1.48 million tons for both
marketing years. Grains traders surveyed by The Wall Street Journal
expected sales of soybeans to be anywhere from 800,000 tons to 1.7
million tons, and corn sales to be 600,000 tons to 1.2 million
tons. "The report was viewed as supportive all around," said Terry
Reilly of Futures International.
Turn for the Worse: With today's deep dip, grain futures on the
CBOT posted their worst week since the early days of the
coronavirus pandemic in the U.S. At today's close, soybean futures
have shed 7.6% since Tuesday, while corn futures dropped 5.8% and
wheat futures fell 7.2%. It's a sharp turn away from the
6-to-7-year highs reached by row crops just a week ago.
Tough Road: U.S. ethanol inventories have dropped slightly this
week, according to data from the EIA. In its weekly report --
delayed due to Martin Luther King Jr. Day on Monday -- the EIA said
inventories fell 64,000 barrels last week to 23.63 million barrels.
Meanwhile, daily production rose slightly, climbing by 4,000
barrels per day to 945,000 barrels per day. Coronavirus continues
to be the main drag on ethanol usage returning to pre-pandemic
levels, with overall gasoline consumption still down 9% from this
time last year.
--The USDA will release its weekly export inspections report at
11 a.m. ET Monday.
--The USDA will release its monthly cold storage report at 3
p.m. ET Monday.
--Railway operator Norfolk Southern will release its
fourth-quarter 2020 earnings before the stock market opens
--The EIA will release its weekly ethanol production and stocks
report at 10:30 a.m. ET Wednesday.
Write to Kirk Maltais at firstname.lastname@example.org
(END) Dow Jones Newswires
January 22, 2021 15:42 ET (20:42 GMT)
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