Wheat Falls as Forecast Hastens Pullback -- Daily Grain Highlights
By Kirk Maltais
--Wheat for September delivery fell 1% to $7.17 1/4 a bushel on
the Chicago Board of Trade Wednesday with rainfall expected to hit
drought areas in the latter-half of the week going into the
--Corn for December delivery fell 0.9% to $5.46 3/4 a
--Soybeans for September delivery rose 0.5% to $13.25 3/4 a
Correction Course: The expectation of rainfall arriving to
parched U.S. growing areas later this week helped pressure corn and
wheat futures Wednesday. For wheat in particular, the outlook for
rainfall arriving to areas where crop conditions are suffering due
to drought is a force causing futures to correct from last week's
run-up to levels last seen in May. "We seem to have past the point
at which the market cares about spring wheat, and in many instances
in the past, when we have had yield problems, the market tends to
top out early in the summer, and then let the cash markets do the
work down the road," said Charlie Sernatinger of ED&F Man
Stock Stress: Grain futures found some support from StoneX's
initial estimates for 2021 crop yields - putting its estimate for
corn yields at 176.9 bushels per acre and soybean yields at 50
bushels per acre, both lower than the USDA's current estimates.
"The totals were under trade whispers and if true, suggest
tightening US 2021/22 end stock profiles," said AgResource. The
USDA will update its figures in next week's WASDE report, and other
groups will be issuing their own yield estimates throughout the
Attention Shift: While weather continues to be a main focus for
grains traders on a day-to-day basis, much of their attention is
shifting towards next week's monthly WASDE report from the USDA.
"We are now just a week away from the August WASDE report and that
is quickly becoming a focal point of the market," said Karl Setzer
of AgriVisor. "There are several analysts who believe the U.S. corn
yield will be lowered in this release given the adverse weather the
crop has been subjected to... as always, the question now becomes
if the good regions are going to be enough to make up for losses in
Shrinking Supplies: Daily production and inventories of U.S.
ethanol fell back in the past week, according to data from the EIA.
In its weekly report released Wednesday, the EIA said daily
production of ethanol for the week ended July 30 fell 1,000 barrels
per day to 1.013 million barrels per day. It's the lowest daily
ethanol production has been since late May. Meanwhile, inventories
also declined, falling 84,000 barrels to 22.65 million barrels.
Analysts surveyed by Dow Jones this week had forecast production to
total anywhere from 1 million barrels per day to 1.03 million
barrels per day. For stocks, analysts had forecasted them to rise
to as high as 22.93 million barrels.
Room for Improvement: Export sales of U.S. corn - which have
been showing growth in the amount of U.S. corn inspected for
shipment to China - may post a boost in the amount of new sales
reported this week, according to estimates from grains traders
surveyed by The Wall Street Journal. Traders forecast sales of U.S.
corn to total anywhere from 100,000 metric tons to 700,000 tons for
the week ended July 29. If sales hit the high end of estimates,
then it'll be an uptick from 414,100 tons reported last week. In
its latest grain export inspections report Monday, the USDA said
corn inspections totaled 1.38 million metric tons for the week
ended July 29 - with shipments to China comprising 839,556 tons of
corn, roughly double from last week.
Record Costs: The cost of fertilizer for farmers has rocketed up
over 50% in Illinois over the past year, according to the
University of Illinois. This uptick in prices is expected to
continue in 2022, making costs the highest they've been since 2015
and nearing record prices seen in 2008. The reason for the higher
prices is surging prices for fertilizer ingredients like anhydrous
ammonia, diammonium phosphate and potash. For farmers, higher input
costs affect their decisions on what to plant - a key question when
looking at tight supplies for row crops like corn, wheat, and
--The USDA will release its weekly export sales report at 8:30
a.m. ET Thursday.
--Beyond Meat Inc. will release its second-quarter earnings
report after the stock market closes Thursday.
--Corteva Inc. will release its second-quarter earnings report
after the stock market closes Thursday.
Write to Kirk Maltais at email@example.com
(END) Dow Jones Newswires
August 04, 2021 15:12 ET (19:12 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.