Wheat Higher on Tighter Global Supply -- Daily Grain Highlights
By Kirk Maltais
--Wheat for December delivery rose 1.7% to $7.72 1/2 a bushel on
the Chicago Board of Trade Thursday in reaction to indications of
tight supplies globally.
--Corn for December delivery rose 1% to $5.62 3/4 a bushel.
--Soybeans for January delivery fell 0.2% at $12.46 a
Supply Shortfall: Wheat futures are leading the CBOT grains
complex higher Thursday in response to inflation concerns as well
as global supply issues. "Global quality milling wheat supplies
remain tight among the major exporters," said Arlan Suderman of
StoneX. "Many mills still need to buy on price pull backs. This
market will remain tight until global supplies can be rebuilt."
Weather issues have been a factor limiting winter wheat planting
Inflation Sensation: Agricultural futures are the beneficiary of
investor's interest in commodities as an inflation hedge.
"Speculators keep talking about inflation and are buying
commodities for an inflation trade," said Jack Scoville of Price
Futures Group. The European Central Bank said today it would keep
its large monetary stimulus unchanged, delaying a decision on
whether to phase out easy money in response to surging inflation as
global supply-chain bottlenecks and shortages weigh on the area's
Better Availability: The reluctance of U.S. farmers to sell
their new corn crop to end market users has subsided, supporting
the elevated production of ethanol in recent weeks. "The industry
is in a much better position than they were one month, two months
ago," said Geoff Cooper, head of the Renewable Fuels Association.
"This harvest coming in is a big crop, and we're seeing that with
ethanol production numbers." Even with farmers being more willing
to sell their freshly-harvested crops instead of holding out for
higher prices, general strength in energy markets are supporting
prices for both ethanol and corn. In its most recent progress
report, the USDA said the US corn harvest is 66% complete.
Season Underway: With the U.S. soybean harvest nearing
completion, grain traders are turning their attention to what's
happening with South America's growing season. Earlier this week,
agricultural consultancy AgRural reported that Brazilian farmers
had sown 38% of the estimated planted area with the oilseeds as of
Oct. 21, up from 22% a week earlier and compared with 23% on the
same date last year. "For the most part, weather conditions in
South America are much more favorable than last year, especially in
central and southern Brazil and Argentina, although Argentina is
starting to show drier soils developing," said Karl Setzer of
AgriVisor. "Even with localized weather issues, trade is expecting
to see larger crops in Brazil than last year."
Looking Ahead: Traders are turning their attention to the USDA's
next WASDE report - which is due out to November 9. "Traders are
discussing the potential that U.S. corn/soybean yields will rise in
the November NASS crop report with the soybean yield in particular
reaching above 52 bushels per acre," said AgResource. "The bears
will clutch to this report as the U.S. harvest tries to push across
the finish line." According to the USDA's latest crop progress
report, the corn and soybean harvests are over 2/3rds complete.
--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.
--The USDA will release its weekly export inspections report at
11 a.m. ET Monday.
--The USDA will release its monthly grain crushings report at 3
p.m. ET Monday.
--The USDA will release its weekly crop progress report at 4
p.m. ET Monday.
Write to Kirk Maltais at firstname.lastname@example.org
(END) Dow Jones Newswires
October 28, 2021 15:29 ET (19:29 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.