Corn Jumps on Export Strength -- Daily Grain Highlights
By Kirk Maltais
--Corn for December delivery rose 1.1% to $5.53 a bushel, on the
Chicago Board of Trade Thursday, amid better-than-expected export
sales figures reported by the USDA this morning.
--Soybeans for November delivery rose 0.2% to $13.28 1/2 a
--Wheat for September delivery fell 0.6% to $7.12 3/4 a
Export Support: Today's export sales report from the USDA, as
well as a notice of a new flash sale of 300,000 metric tons of
soybeans to unknown destinations, has grain futures on the CBOT
higher Thursday. "While current crop year sales for corn and beans
did not give campers much to write home about, new sales were not
all that bad," said Dan Hueber of the Hueber Report. Sales of wheat
and soybean exports fell within the estimates of traders surveyed
by The Wall Street Journal this week, but corn sales beat targets
-- across both marketing years, sales of U.S. corn for the week
ended July 29 totaled 898,400 metric tons. Most of these sales were
made for 2021/22 corn, with Mexico and Japan being the leading
Getting Ready: Much of the trading seen throughout the day is in
anticipation of what the USDA's WASDE report next week may say
about U.S. grain supplies and demand. "I expect some longs to exit
positions as private trade groups are hinting for U.S. production
to end up large for corn and soybeans, although demand for new-crop
is picking up according to USDA export sales and latest USDA
24-hour announcement," said Terry Reilly of Futures
Technical Trading: Wheat futures trading on the CBOT finished
down today, making it the third consecutive session that they've
traded lower. However, much of this movement is technical in nature
- with fundamentals still supportive for prices, said Arlan
Suderman of StoneX. "Wheat prices got the short end of inter-market
spreads, dragging them into the red," said Mr. Suderman. "Spring
wheat fundamentals remain tight...USDA is expected to notably cut
its production estimates for U.S. spring wheat, Canadian wheat, and
for Russian wheat production in next week's WASDE report."
Balance of Things: Healthy conditions of corn and soybean crops
in the Eastern Corn Belt are unlikely to outweigh the damage being
done to crops in the Western and Northern Plains, said Linn &
Associates. In estimates released today, the trading firm forecasts
the national corn yield at 176.1 bushels per acre, and soybean
yield at 49.5 bushels per acre -- both below the USDA's current
estimates. "Record yield potential exists in many Eastern Belt
states -- particularly Illinois, Indiana, Michigan, and Kentucky,"
said the firm. "Unfortunately, significant production losses have
likely occurred in the west, especially looking at the Dakotas and
parts of Minnesota. We think it will be very difficult to attain
'above trend-line yields' in corn, even if conditions turn
near-perfect in the West."
Not Looking Likely: A potential decision by the Biden
Administration to increase U.S. biofuel mandates would benefit corn
prices - but such a decision is unlikely, said Capital Economics.
According to the firm, U.S. President Biden is unlikely to
implement a measure that would increase gasoline prices for
consumers ahead of the 2022 midterm elections. "All told, we
suspect that U.S. corn demand will hold steady over the next
eighteen months as biofuel mandates are left unchanged," said the
firm. "As a result, the global market will flip into a surplus,
which underpins our view that the price of corn will fall to 450 US
cents per bushel by end-2022."
--The CFTC will release its weekly commitment of traders report
at 3:30 p.m. ET Friday.
--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.
Write to Kirk Maltais at email@example.com
(END) Dow Jones Newswires
August 05, 2021 14:58 ET (18:58 GMT)
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