By Kirk Maltais

 

-- Soybeans for July delivery rose 1.8% to $16.47 1/2 a bushel on the Chicago Board of Trade on Wednesday, the highest settlement since September 2012 as the USDA's monthly report confirmed growing demand for soyoil and other products.

-- Corn for July delivery fell 1% to $7.14 3/4 a bushel.

-- Wheat for July delivery fell 1.6% to $7.29 3/4 a bushel.

 

HIGHLIGHTS

 

Revving Up: In its WASDE report Wednesday, the USDA projected strong growth in the amount of U.S. soyoil that will be consumed by the biofuels industry this year. About 12 billion pounds of soyoil are projected to be used by biofuel makers in 2021/22, well up from 9.5 billion pounds in 2020/21. U.S. production is also expected to rise, but only by 430 million pounds.

Cut to Demand: Exports of U.S. corn in the next marketing year are expected to slide by 325 million bushels, the USDA said. "Unfavorable production prospects are forecast to limit exports out of Argentina and Brazil during 2020/21, supporting U.S. exports during the first half of 2021/22," the agency said in WASDE. "However, a 335-million-bushel increase in the combined corn exports for Ukraine and Russia in 2021/22 is expected to increase competition for the United States, reducing the forecast U.S. share of global corn trade from a year ago." In response to this projection, CBOT corn futures turned lower Wednesday.

Short-Term Muscle: Ethanol production jumped this week and stockpiles sank. U.S. production grew to 979,000 barrels per day for the week ended May 7, the EIA said. That's above the high end of the range projected by analysts surveyed by Dow Jones Newswires this week. Ethanol inventories came in at 19.39 million barrels, a drop of over 1 million barrels from the previous week and the lowest since December 2016.

 

INSIGHT

 

Competing Outlooks: Crop-size estimates weren't in short supply -- in addition to the USDA's WASDE, China's government released its own supply and demand data. "First up, the Chinese Ag Ministry tells us that nation will produce 271.81 MMT of corn this year, which would be a 4.3% increase over last," said Dan Hueber of the Hueber Report. "The area planted is estimated to have increased 3.4% to 42.67 million hectares and with better yield making up the rest of the production increase." Brazil and France also released new data, both showing lower than previously expected ending stocks and production.

Crazy For Corn: Grain traders surveyed by The Wall Street Journal are forecasting a big jump in corn exports reported for the week ended May 6, due in part to a streak of large flash sales that started last week. Traders believe corn sales could be as high as 2.4 million metric tons, compared with the 243,600 tons across both marketing years reported by the USDA last week. Sales for wheat and soybeans are expected to be down, with wheat potentially as low as 75,000 tons across both marketing years, well off the 304,000 tons reported last week.

 

AHEAD

 

--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 USDA will release its weekly export inspections report at 11 a.m. ET Monday.

--The USDA will release its weekly crop progress report at 4 p.m. ET Monday.

 

Write to Kirk Maltais at kirk.maltais@wsj.com

(END) Dow Jones Newswires

May 12, 2021 16:29 ET (20:29 GMT)

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