Wheat Higher as Russia-Ukraine Concerns Grow - Daily Grain Highlights
By Kirk Maltais
--Wheat for March delivery rose 3.6% to $7.96 1/2 a bushel on
the Chicago Board of Trade Wednesday, rising 7.4% in the past two
sessions in reaction to the tense situation at the Russia-Ukraine
border as well as stronger macro markets.
--Soybeans for March delivery rose 2.2% to $13.91 1/4 a
--Corn for March delivery rose 1.8% to $6.10 1/2 a bushel.
Fluid Situation: Russia-Ukraine border tensions continue to have
grain traders on edge. "Any intrusion by Russian troops into
Ukraine would send world grain prices sharply higher," said
AgResource. "Any Russian/Ukraine skirmish would be exceptionally
bullish grain with Russian ag exports embargoed in economic
sanctions." The Wall Street Journal reported today that the Biden
administration has approved $200 million in new defensive military
assistance to Ukraine, although the U.S. has also said that it will
not provide direct military force in the event of a Russian
Stronger Indicators: Macro market indicators were also providing
a lift for grain futures today. "Corn and wheat are looking strong
on the charts, aided by a lower dollar and robust crude oil prices,
and soybeans seem keen to rebound from yesterday's two-week lows as
well," said Matt Zeller of StoneX. For soybeans, yesterday's crush
report from NOPA showing an elevated crush rate is also lifting
futures, Mr. Zeller said.
Go With the Flow: Although world events and macros are
supporting CBOT grain futures today, what's also driving prices in
recent days is a general return to commodities by fund traders
after a brief pullback. "After a somewhat discouraging performance
last week, grain and soy markets have come roaring back," said Dan
Hueber of the Hueber Report. "One must suspect it is being
stimulated by technical factors, fund money flow, and a desire to
invest in commodities as an inflation hedge."
Power Play: Analysts surveyed by Dow Jones this week are
forecasting an uptick in U.S. ethanol inventories, predicting a
rise to above 23 million barrels. Analysts forecast stocks to be
anywhere between 23.01 million barrels to 23.9 million barrels. If
inventories hit the high end of expectations, then it'll be the
highest they've been since last February, when they surged to above
24 million barrels. Higher prices for crude oil have been
supportive for grain futures, specifically corn. "Ag products are
suddenly getting sucked into the crude oil rally, with demand for
soybeans and corn expected to increase, dragging wheat along for
the ride," said Robert Yawger of Mizuho Securities USA.
--The EIA will release its weekly ethanol production and stocks
report at 10:30 a.m. ET Thursday.
-The USDA will release its monthly livestock slaughter report at
3 p.m. ET Thursday.
--The USDA will release its weekly export sales report at 8:30
a.m. ET Friday.
-The USDA will release its monthly Cattle on Feed 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 Kirk Maltais at email@example.com
(END) Dow Jones Newswires
January 19, 2022 15:27 ET (20:27 GMT)
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