Soybeans Plummet on Weather and Economic Fears
By Kirk Maltais
-- Soybeans for July delivery fell 8.2% to $13.29 3/4 a bushel
on the Chicago Board of Trade Thursday, dropping in reaction to
both reports of rainfall in some U.S. crop-growing areas as well as
concerns about inflation squeezing demand for U.S. grains.
-- Corn for July delivery fell 5.9% to $6.33 a bushel.
-- Wheat for July delivery fell 3.6% to $6.39 a bushel.
Nosedive: Concerns about higher inflation set off a spate of
selling across commodities, with grains posting deep losses
Thursday, reversing the buildup by managed money funds of
record-size positions in anticipation of supply issues for U.S.
"An unprecedented money supply combined with expanded position
limits amid inflation talk and fundamental risks set the stage for
a volatile spring and summer," said Arlan Suderman of StoneX,
adding that a series of news articles impacting both the supply and
demand side of grains triggered a selloff in futures last week,
extending into Thursday. "Prices continue to hit sell-stops as they
fall, leading to more traders exiting positions while amplifying
the downward move on momentum selling," said Mr. Suderman.
It's All About the Weather: Weather models have added additional
rainfall to their forecasts, putting pressure on grain futures
"Improved weather conditions, uncertainty over U.S. fuel
blending mandates and Chinese moves to target speculators and
hoarding, are putting pressure on ag products," said Robert Yawger
of Mizuho Securities USA.
According to DTN, showers seen in the Midwest this week have
been isolated, with many areas still missing rainfall and remaining
in drought conditions.
Crunch Time: High prices for U.S. grains appear to be finally
making an impact on grain export sales, with sales being at the low
end of trader expectations this week.
"The numbers all fell within the range of estimates, but once
again generally reflect declining demand for our products," said
Dan Hueber of the Hueber Report.
The slump in sales comes after grain traders discussed demand
rationing, or sales of U.S. grains falling amid high prices and
tight supplies for grains. Export sales reported by the USDA
Thursday were low, erring on the low side of estimates provided by
traders surveyed by The Wall Street Journal.
Hanging in the Balance: While rainfall hit certain crop-growing
areas in the Midwest, other areas that sorely need the rain have
been missed, said the American Society of Farm Managers and Rural
"Here in Iowa, which is corn and soybean country, growth stage
and plant health are hanging in as of today, but light soils are
showing stress and the crops are in danger of deteriorating quickly
without significant rain," said ASFMRA President Dennis Reyman.
The rainfall that impacted other areas is a factor pushing
grains futures to limit-down closes Thursday.
Domestic Slump: Grain shipments in the U.S. are down this week,
according to data from the USDA. In its latest grain transportation
report, the government says U.S. Class I railroads originated
21,352 grain carloads during the week ending June 5, down 16% from
the previous week.
Meanwhile, barged grain movements totaled 819,200 tons, 27% less
than the previous week.
The decreased domestic shipments comes after Thursday's export
sales report showed low export sales of U.S. grains across the
-- The CFTC is scheduled to release its weekly commitments of
traders report at 3:30 p.m. EDT Friday.
-- The USDA is due to release its weekly export inspections
report at 11 a.m. EDT Monday.
-- The USDA is scheduled to release its weekly crop progress
report at 4 p.m. EDT Monday.
Write to Kirk Maltais at email@example.com
(END) Dow Jones Newswires
June 17, 2021 15:48 ET (19:48 GMT)
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