Wheat Falls in Reaction to Fed Comments
By Kirk Maltais
--Wheat for May delivery fell 0.8% to $6.51 a bushel, on the
Chicago Board of Trade Thursday, with the overall grains complex
sinking late in the day in reaction to comments from Federal
Reserve Chairman Jerome Powell.
--Corn for May delivery fell 0.5% to $5.32 1/2 a bushel.
--Soybeans for May delivery rose 0.2% to $14.10 1/2 a
Fed Fears: In his last scheduled public appearance before the
Fed's next policy meeting March 16-17, Mr. Powell affirmed his
intention to maintain ultra-low interest rates until the U.S. labor
market improves much further - an affirmation that sent equities
and commodities alike down in afternoon trading. "Wheat traded both
sides of unchanged before slipping under the waves late, after Fed
Chairman Powell disappointed the macro boys and the dollar got
stronger," said Charlie Sernatinger of ED&F Man Capital.
Sparse Precipitation: A dry outlook for weather in Argentina
provided support for soybean prices Thursday. "Markets trading
mixed to higher overnight with the dry outlook in Argentina as well
as the impossibly tight U.S. bean balance sheet projections
providing support," said Doug Bergman of RCM Alternatives. Isolated
showers are forecast for Argentina into next week, with
temperatures above normal, according to DTN.
Taps Turned Off: Strength in global vegetable oil markets were
also a source of support for soybean futures Thursday. "Global veg
oils are supporting soybeans," said Karl Setzer of AgriVisor. "Not
just from Asia, but the canola market from Canada as well."
Tightness in supplies has been a factor pushing futures contracts
on Asian and Canadian exchanges. For CBOT soybeans and soyoil, the
support kept them higher throughout trading today - although
soybeans gave back most of their gains later in the day, soyoil
closed up 1.9% to $50.71 per pound.
Preparing for a Wave: Cargill Inc. is ramping up investment in
its soybean operations as the oilseed is set to dominate the
agricultural stage in 2021. The year is young, but U.S. soybean
exports in dollar terms last year were about 40% ahead of 2019's
level, driven by a late 2020 surge in shipments to China, and crop
problems in South America. With soaring prices likely to lead to
big US planting, Cargill is plowing $475 million into its soybean
facilities, expanding processing plants in Ohio and Iowa and
automating some loading operations in Kansas and Missouri.
Crestfallen Corn: New corn export sales for the week ending Feb.
25 came in lower than expected by grains traders - totaling 154,700
metric tons across both the 2020/21 and 2021/22 marketing years.
That's well below the low end of 500,000 tons forecast by traders
surveyed by The Wall Street Journal this week. However, exports -
actual shipments of corn already sold - hit a marketing-year high
in this week's report, totaling 2.01 million tons. Meanwhile, wheat
and soybean totals fell near the low end of traders' forecasts.
Shedding Stocks: The USDA's monthly WASDE report is expected to
show another cut to U.S. grain stockpiles, according to analysts
surveyed by The Wall Street Journal. Corn stockpiles for the
2020/21 marketing year is expected to fall to 1.46 billion bushels,
down from 1.5 billion bushels projected last month. Meanwhile,
soybean inventories are expected to drop 3 million bushels to 117
million bushels, and wheat stocks are expected to stay unmoved at
836 million bushels. World corn and soybeans inventories are also
expected to decline - with corn falling 1.2 million metric tons to
285.3 million tons and soybeans falling 700,000 tons to 82.7
Supply Backup: Grain shipments were lower near the end of
February, according to the USDA's latest grains transportation
report. For the week ending February 20, U.S. Class I railroads
originated 18,860 grain carloads, down 17% from the previous week
and 1% lower than last year. Meanwhile, barge shipments of grains
totaled 439,100 metric tons for the week ending Feb. 27 - down 10%
from the previous week. A deep freeze in U.S. crop-growing areas
stifled supply chains in February, but a thaw seen nationwide has
allowed operations to return to normal.
--The CFTC will release its weekly commitment of traders report
at 3:30 p.m. ET Friday.
--The USDA will release its weekly export inspections report at
11 a.m. ET Monday.
--The USDA will release its monthly supply and demand report at
noon ET Tuesday.
Jacob Bunge contributed to this article.
Write to Kirk Maltais at email@example.com
(END) Dow Jones Newswires
March 04, 2021 15:40 ET (20:40 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.