Wheat Higher as Market Mulls Weather Patterns
By Kirk Maltais
-- Wheat for September delivery rose 1.3% to $6.63 3/4 a bushel
on the Chicago Board of Trade Wednesday, with weather systems
delivering rainfall to the U.S. Midwest, but missing wheat-growing
-- Corn for July delivery rose 0.7% to $6.64 1/4 a bushel.
-- Soybeans for November delivery fell 0.2% to $13.00 1/4 a
Adding Premium: While areas of the Midwest are receiving rain to
support nascent crops, U.S. wheat appears to be getting the least
rain, which had traders adding a weather premium to prices
"The weather is a tale of two cities, the east is wet, but the
Northern Plains continue to be dry," said Charlie Sernatinger of
ED&F Man Capital.
In the latest crop progress report, the USDA said spring wheat
quality was only 27% good or excellent, well below last year's
Not Enough: The USDA reported a new flash sale of U.S. soybean
exports to China Wednesday totaling 330,000 metric tons. Even so,
grain traders generally didn't regard the new sales as indicative
of a sustained surge in demand for soybeans by China, allowing the
most-active contract to slip.
Analysts surveyed by The Wall Street Journal showed a wide range
of possibilities for U.S. soybean exports. Traders forecast soybean
sales to range anywhere from none to 1.05 million metric tons for
the week ended June 17. By comparison, soybean sales totaled only
71,800 tons in last week's report.
Overstated Odds: Many grain traders think the USDA's June 30
planted acreage report will show a large jump versus the agency's
original outlook of 91.1 million acres of corn and 87.6 million
acres of soybeans. One research firm forecast growth of as much as
7 million acres between the two crops.
However, given the supportive weather seen in this planting
season, such growth is unlikely, said Scott Irwin of the University
of Illinois. According to Dr. Irwin, good weather would have made
it more likely for farmers to get the majority of their planting
done early, and the USDA has probably already accounted for it. He
forecasts planted acres will grow a more modest 1.5 million to 2
million acres between corn and soybeans.
Growing Stockpile: Inventories of U.S. ethanol rose for the
fifth consecutive week, according to government data, with the
uptick exceeding estimates of analysts. In a weekly report from the
EIA, U.S. ethanol inventories climbed 518,000 barrels to 21.1
million barrels per day for the week ended June 18. Analysts
surveyed by Dow Jones this week forecast stocks to rise from
anywhere between 20.65 million barrels and 21 million barrels.
Production also rose, slightly exceeding analyst expectations.
Production hit a rate of 1.048 million barrels per day this week,
up 23,000 barrels per day from last week. Traders had expected
production to be anywhere from 1.025 million barrels to 1.045
-- The USDA is scheduled to release its weekly export sales
report at 8:30 a.m. EDT Thursday.
-- The USDA is due to release its quarterly hogs and pigs report
at 3 p.m. EDT Thursday.
-- The USDA is scheduled to release its monthly livestock report
at 3 p.m. EDT Thursday.
Write to Kirk Maltais at email@example.com
(END) Dow Jones Newswires
June 23, 2021 15:37 ET (19:37 GMT)
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