Corn Futures Falls as Rainfall is Expected -- Daily Grain Highlights
By Paulo Trevisani
--Corn for December delivery fell 3.3% to $5.43 a bushel on the
Chicago Board of Trade on Friday, as weather forecasts turned
bearish with the prospect of rain helping crop yield.
--Wheat for September delivery fell 1.2% to $6.84 a bushel
--Soybeans for November delivery fell 0.8% to $13.51 3/4 a
Sog Story: Grain futures slid as expectations of rainfall
tempered fears of tight supply caused by hot and dry conditions.
"Weather outlook looks wetter for the late weekend into early next
week for the Plains," Futures International said about corn.
Meanwhile, the USDA reported flash export sales of 100,000 metric
tons of soybeans for delivery to Mexico during the 2021/22
marketing year, but overall weak exports data continued to weigh
down on prices.
Weighed Down Wheat: Weak exports and forecasts of wetter weather
drove the most-active wheat contract down. Crops around the world
remain under pressure from extreme weather conditions, but traders
seemed to sense the opportunity for a correction. Continuous most
active wheat futures were up around 3.8% over the past month and
7.6% year-to-date. Price support may still come back, though. "The
bad weather is coming back as hot and dry conditions are in the
forecast...for the next couple of weeks," Price Futures said.
"World prices might have bottomed and should start to move higher,
supporting wheat futures markets in the US."
Corn's Condition: Corn fell amid signs of possible rainfall that
could alleviate production losses from dry weather. But it could
change fast, depending on how the forecasts evolve. "The
fundamentals haven't changed much, the hot and dry midwest weather
has continued to be front and center," RJO said. "Historically, we
usually see corn pull back around this time of year but so far that
hasn't been the case," the broker said, reminding that Monday's
Crop Condition Report could set the tone "as the market looks for a
Storage Ahead?: Weather forecasts and weak exports data hurt
grain prices a day after the USDA reported disappointing foreign
sales of U.S. corn and soybeans. There's debate about how long the
heat will stay around the farmland and whether there will be
bearish rain. AgriVisor reports that some grain producers are
considering storing their old corn and soybeans crops along with
the upcoming harvest.
Credit Matters: Credit availability has been a factor on wheat
prices, Marex said, along with forecasts of tight supply and strong
demand. "The structural link between credit and price held well in
previous years. Unfortunately, we are registering a disconnect
between credit creation and wheat prices so far in 2001," the
broker said, adding that it may be making importing harder. "We
qualify the divergence as 'negative', e.g., contracting credit and
rising prices, based on the assumption that short-term credit
facilitates importers' demand." Marex said the divergence is
starting to close. "Broadly speaking, this is a price-positive
--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.
--The EIA will release its weekly ethanol production and stocks
report at 10:30 a.m. ET Wednesday.
--The USDA will release its weekly export sales report at 8:30
a.m. ET Thursday.
Write to Paulo Trevisani at firstname.lastname@example.org
(END) Dow Jones Newswires
July 23, 2021 15:37 ET (19:37 GMT)
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