By Kirk Maltais

 

--Wheat for September delivery rose 1.5%, to $7.10 3/4 a bushel, on the Chicago Board of Trade on Wednesday, amid projections that the amount of wheat in the world looks to be smaller.

--Corn for December delivery rose 0.5%, to $5.68 1/2 a bushel.

--Soybeans for November delivery rose 0.1%, to $13.89 3/4 a bushel.

 

HIGHLIGHTS

 

Shrinking Crop: Declines to the world's wheat crop due to dry weather are helping pull prices higher--and much of the focus is on what's happening with the Russian crop. "The Russian crop estimates seem to be still sliding slightly downward," said Charlie Sernatinger of ED&F Man Capital. "The Russian farmer seems to be tight fisted this summer, as he is unhappy with how much of his price the state has peeled off for itself in the form of export taxes. This is still about the supply side, not the demand side." Russia is the world's biggest exporter of wheat, and is often the main driver of prices globally.

In The Driver's Seat: The weather in U.S. growing areas continued to be a main driver for price movement on the CBOT overall. "Weather remains the primary driving factor in price discovery at the present time," said Karl Setzer of AgriVisor. "Corn is still pollinating across much of the United States and ears are being set and starting to fill. As this takes place some agronomists claim yield can be greatly impacted. The same is true on soybeans where pod setting and filling is starting to take place." Above-normal temperatures are expected in U.S. growing areas over the next two weeks, according to DTN.

 

INSIGHTS

 

Sales Slump: Export sales of U.S. soyoil have been negative in the past two weeks of USDA reporting, and are forecast to be low again this week, according to grains traders surveyed by The Wall Street Journal. Traders forecast sales to be anywhere from a reduction of 4,000 metric tons to sales of 10,000 tons. Last week, the USDA reported that outstanding soyoil sales had been reduced by 900 tons, and by 400 tons the week before that. After plummeting last month, soyoil futures on the CBOT had been on the upswing, but finished down in trading today, by 2%, to 62.65 cents per pound. In turn, a lack of support from soyoil put pressure on soybean futures today.

Ethanol Inventories Soar: Inventories of ethanol in the U.S. climbed this week, well above the expectations of analysts. In the EIA's latest report Wednesday, inventories of U.S. ethanol rose 1.38 million barrels to 22.52 million barrels for the week ended July 16. That's well above the expectations of analysts surveyed by Dow Jones this week, who expected inventories to be anywhere from 20.1 million barrels to 21.23 million barrels. Meanwhile, production fell 13,000 barrels per day to 1.028 million barrels per day--which is a bigger decline than expected by analysts. Analysts had forecast production to be anywhere from 1.036 million barrels to 1.061 million barrels.

Marching On: The European harvest of grains, mainly wheat, is moving forward this week. "Harvesting is not surprisingly behind last year, but the more favourable conditions are now allowing harvesting to progress," said AgriTel. "The first echoes seem to be satisfactory for the moment on the quality of the harvested cereals, despite some local disappointments. French operators are obviously paying close attention to this point because the 2021/2022 campaign should lead, with the production volumes expected in Europe, to see an increase in export activity."

 

AHEAD:

 

--The USDA will release its weekly export sales report at 8:30 a.m. ET Thursday.

--The USDA will release its monthly cold storage report at 3 p.m. ET Thursday.

--The USDA will release its monthly livestock slaughter report at 3 p.m. ET Thursday.

 

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

 

(END) Dow Jones Newswires

July 21, 2021 14:52 ET (18:52 GMT)

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