Soybeans Fall as Soyoil Futures Collapse
By Kirk Maltais
--Soybeans for July delivery fell 1.2% to $14.48 1/2 a bushel,
on the Chicago Board of Trade Wednesday, weighed down by the steep
decline in soyoil futures.
--Wheat for July delivery rose 0.2% to 6.62 3/4 a bushel.
--Corn for July delivery rose 0.8% to $6.73 a bushel.
Bottom Falls Out: Both soybean oil and soybean futures fell
Wednesday, with soyoil finishing down 5.3%. It is the sixth
straight day that those futures have declined--with the most-active
contract shedding over 14% in that timeframe. This comes after
these futures had risen to all-time highs of over 72 cents a pound,
based on enthusiasm surrounding the renewable fuels market.
However, speculation that the Biden Administration may extend aid
to oil refineries seeking to avoid clean-fuel mandates has put
pressure on soyoil--which has pressured soybeans.
Weather Market: Grain futures trading on the CBOT were mixed
Wednesday, with weather being at the forefront of trader's minds.
Although rainfall has been seen in many crop-growing areas in the
first half of this week, that precipitation is expected to soon
stop--and in many areas, crops need more moisture. "Temperatures
going below normal will help with the stress, but crops are in dire
need of moisture through most of the region," said DTN, referring
to the Northern Plains, where a lot of dryness is being seen. The
Northern Plains produces corn, soybeans, and wheat.
Back on the Grind: After bowing out of a tender Tuesday, Egypt's
grain-buying authority has relisted its tender for 55,000 metric
tons to 60,000 tons of soft or milling wheat, for delivery in late
August. As Tuesday's cancellation of its tender sent a signal that
wheat prices are too high, Wednesday's relisting of its tender
suggests that high prices are not as large of an issue as
previously thought. "U.S. wheat is higher as Egypt retenders," said
Terry Reilly of Futures International.
Lingering Volatility: Disagreement in weather models regarding
the amount of rainfall coming to U.S. growing areas is expected to
keep prices volatile for the foreseeable future, said Craig Turner
of Daniels Trading. "The Euro model has been trending hotter and
drier and the U.S. (GFS) has been cooler and wetter," said Mr.
Turner. "The GFS has done a better job recently predicting the
weather and that is what traders are going with for the moment."
Tight inventories of old crop corn and soybeans is amplifying the
importance of the weather, Mr. Turner adds.
Pulling Back: U.S. production of ethanol took a dive in the past
week, according to data from the EIA--running counter to analyst
forecasts and expectations that U.S. consumers will consume a
growing amount of gas. In its weekly report, the EIA said that U.S.
ethanol production fell 42,000 barrels per day to 1.025 million
barrels per day for the week ended June 11. Analysts surveyed by
Dow Jones this week had forecast production to rise for the fourth
straight week. Meanwhile, ending inventories of U.S. ethanol jumped
this week, more than expected by analysts. Stocks rose 642,000
barrels to 20.6 million barrels. Analysts surveyed had forecast
stocks to rise to a maximum of 20.56 million barrels.
More Normal Pace: After a sharp increase last week, export sales
of U.S. wheat are expected to return to a more normal level,
according to grains traders surveyed by The Wall Street Journal.
After recording sales of over 1.1 million metric tons last week,
traders forecast wheat sales to total anywhere from 200,000 tons to
475,000 tons. The sharp uptick in wheat sales last week were due to
sales carried over from the 2020/21 marketing year to 2021/22.
--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 email@example.com
(END) Dow Jones Newswires
June 16, 2021 15:05 ET (19:05 GMT)
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