Wheat Leads Grains Rally Amid Supply Concerns -- Daily Grain Highlights
By Paulo Trevisani
--Wheat for September delivery rose 2.1% to $6.88 3/4 a bushel
on the Chicago Board of Trade on Wednesday, amid forecasts of
crop-hurting weather conditions around the globe.
--Corn for December delivery rose 0.5% to $5.49 a bushel.
--Soybeans for November delivery rose 0.1% to $13.61 a
Watch Wheat: Wheat led a mostly bullish grains trade as
forecasts of weather unfavorable to crops fueled bets on reduced
supply. Besides the U.S. heat, "the market is hearing about too wet
weather in China and Europe and dry conditions in southern Russia
and Kazakhstan," Price Futures said. "It has been very cold in
South America and the winter crops are in trouble in Brazil and
Paraguay," the broker said, adding that U.S. white winter wheat
production "is also being hurt and impacted by drought and heat
Too Little, Too Late: Traders downplayed forecasts of cooling
weather Wednesday and bet it may be too late for crop yields to
recover from the dry heat. "The lack of subsoil moisture west of
the Mississippi is supportive [of prices] especially with the lack
of rain and extreme heat," Summit's Tomm Pfitzenmaier said.
"However, the forecast for next week is a bit better with lower
temperatures and a little better chance for rain." Meanwhile, frost
in Brazil was reportedly hurting local corn and wheat crops.
Feet Of Clay: Exceptional demand strength won't be there to
support corn prices much longer, as it has during the latest rally,
Marex said. "The prospects for similar conditions in the next 2-4
weeks are practically non-existent," according to the broker.
"Persistent weakness of the U.S. dollar and persistent strength of
the [Chinese yuan] might have something to do with [strong
demand]," Marex said, adding that "our FX Impact Index remains in
favour of the stabilization of demand in late July and early
All Tanked Up: Ethanol stocks increased and production declined
last week, the EIA said, a bearish development for corn prices.
Futures International noted that stocks were the highest since
February and production was the lowest since May. "The slowdown in
corn crush reflects tighter domestic supplies and high basis,
pressuring crush margins," the broker said. U.S. inventories rose
to 22.7 million barrels in the week ended July 23, from 22.5
million barrels the week before, within the 22.6 million to 23.5
million range of analysts forecasts in a Dow Jones survey.
Production was 1.014 million barrels a day, down from 1.028 million
barrels a day, versus forecasts ranging from 1.008 million to 1.038
--The USDA will release its weekly export sales report at 8:30
a.m. ET Thursday.
--The USDA will release its monthly agricultural prices report
at 3 p.m. ET Friday.
--The CFTC will release its weekly commitment of traders report
at 3:30 p.m. ET Friday.
Write to Paulo Trevisani at firstname.lastname@example.org
(END) Dow Jones Newswires
July 28, 2021 15:26 ET (19:26 GMT)
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