Wheat Rises on Australian Shortfall
By Kirk Maltais
--Wheat for May delivery rose 2.5% to $6.66 1/4 a bushel on the
Chicago Board of Trade Tuesday amid indications of tighter world
--Soybeans for May delivery rose 1.5% to $14.12 1/2 a
--Corn for May delivery rose 1.3% to $5.45 a bushel.
Short Down Under: Wheat futures led the way higher Tuesday
following word that Australia is forecasting a 25% decline in wheat
output in 2021/22. Meanwhile, soybean and corn futures also
finished on the plus side even though both started lower in the
pre-market as speculative money moved out of big long
Weather Warnings: The weather outlook for South America took a
turn for the worse, which helped grain futures turnaround in U.S.
trading and close the day higher. The weather in Brazil is expected
to be wetter in some areas, while dryer in Argentina -- both of
which are bad for crops there. "Soybeans rallied on harvest delays
[in] Brazil [for the] next 2 weeks," said Jim Roemer of Best
Weather Inc., adding that the dry weather in Argentina comes "at
this critical time."
Warming Up: U.S. ethanol production is expected to rebound this
week as the country recovers from the Midwest deep freeze last
month. Analysts informally surveyed by Dow Jones pegged production
anywhere from 688,000 barrels per day to 890,000 barrels per day,
which would be an improvement from 658,000 barrels per day reported
last week by the EIA. Meanwhile, analysts surveyed believe that
ethanol inventories will drop in this week's report down to
anywhere from 22.25 million barrels to 22.685 million barrels, from
22.785 million barrels last week.
Watch WASDE: March's monthly WASDE report isn't usually seen as
a big mover of CBOT grain futures, but this report could buck that
trend, said Arlan Suderman of StoneX. "It matters a lot more when
stocks are tight, when relatively small adjustments to the balance
sheet can cause a more significant price response," said Mr.
Suderman. "Traders will be looking for changes in Argentine and
Brazilian corn and soybean production estimates, as well as U.S.
export targets for the two commodities," he added.
Dimming Outlook: While U.S. farmers see current market
conditions as supportive for agriculture, that optimism is
increasingly starting to fade looking to the next marketing year.
According to a survey conducted jointly by Purdue University and
the CME Group, an index tracking farmer's future expectations
dropped 20% since hitting an October high. "Concerns about possible
policy changes affecting agriculture, and eroding confidence in
future growth in ag trade, continue to weigh on producers' future
expectations," said James Mintert, director of Purdue University's
center for commercial agriculture.
--The EIA will release its weekly ethanol production and stocks
report at 10:30 a.m. ET Wednesday.
--The USDA will release its weekly export sales report at 8:30
a.m. ET Thursday.
--USDA and Statistics Canada release its biannual reports on
cattle, sheep, and hog herds at 3 p.m. ET Thursday.
Write to Kirk Maltais at firstname.lastname@example.org
(END) Dow Jones Newswires
March 02, 2021 15:47 ET (20:47 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.