Corn Higher on Adverse South American Weather
By Kirk Maltais
--Corn for May delivery rose 2.4%, to $5.45 1/2 a bushel, on the
Chicago Board of Trade Friday, in response to weather forecasts
indicating that weather in South American growing regions will
continue to challenge the health of the crop and farmers' ability
to harvest it.
--Soybeans for May delivery rose 1.4%, to $14.30 a bushel.
--Wheat for May delivery rose 0.3%, to $6.53 a bushel.
Back to Positive: CBOT grain futures surged Friday, due in part
to indications that dryness in Argentina and overwhelming
precipitation in Brazil will not ease in the coming weeks. "The
bull has returned to give it another go and at least finish out the
week on a strong note," said Dan Hueber of the Hueber Report.
Overall, corn and wheat in particular have been on the decline
since late February, with today's movement bucking that trend.
Getting Ready: Some grains traders trained their focus on next
week's WASDE report, said Karl Setzer of AgriVisor. "The most
interest going into this release will be on demand to see if the
USDA holds carryout projections steady or lowers them," said Mr.
Setzer. Analysts surveyed by The Wall Street Journal forecast
soybean ending stocks at 117 million bushels, down 3 million from
last month's projection. Corn stockpiles are also projected to
fall, while wheat stockpiles are expected to be unchanged.
Extended Trend: South American weather continues to be a source
of support for CBOT grains futures. "The outlook remains warm and
dry for most of Argentina's core crop production areas for the next
week, while very heavy rains continue in portions of Mato Grosso of
Brazil, as well as some areas of southern Brazil," said Arlan
Suderman of StoneX. With a lack of flash export sales reported by
the USDA this week, traders speculate that much of China's demand
has now shifted to buying South American exports.
Bigger Interest: Exports of U.S. ethanol to China grew in a big
way in January--with exports in January totaling 164.6 million
gallons, a record-high for January exports according to the
Renewable Fuels Association. "Three-quarters of shipments were
destined for just five countries, with spikes in purchases by India
and China sufficient to supplant Canada as our largest customers,"
said the RFA, adding that sales to China grew by 81%, while sales
to India grew by 10 times what they were in the previous month.
U.S. ethanol production is still below where it was pre-pandemic,
with the EIA reporting this week that production through Feb. 26
totaling 849,000 barrels per day.
--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.
--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
March 05, 2021 14:51 ET (19:51 GMT)
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