By Kirk Maltais
-- Wheat for September delivery fell 2.9% to $7.63 1/4 a bushel
on the Chicago Board of Trade Wednesday after Iraq announced that
it had cancelled a previously announced tender for U.S. wheat and
India announced a bigger-than-expected projection for its next
-- Corn for December delivery rose 0.3% to $6.12 a bushel.
-- Soybeans for November delivery rose 0.7% to $13.90 a
Weight of the World: A cancellation of a tender by Iraq, which
was previously announced for 50,000 metric tons of U.S. wheat, put
pressure on futures.
"Wheat prices came under pressure today on chatter in the cash
market that Iraq cancelled its tender due to high prices," said
Arlan Suderman of StoneX in a note. "Yet, prices largely remain
within the range of the past month to this point."
If true, the cancellation comes after India's government
estimated the country's wheat crop as larger than previously
expected, this despite hot weather seen as hurting crops there.
At the Forefront: The watch for rainfall -- or the lack thereof
-- continued to be the driving force behind grain trader decisions
Wednesday, said Jack Scoville of Price Futures Group.
"We got some rain in the region lately but we need a lot more,"
Mr. Scoville told the WSJ. "Corn yields are already affected in a
negative way and soybeans will really start to suffer without more
Weather forecasts for crop-growing areas have turned drier, he
added, although temperatures are expected to remain mild.
No More for Now: The declines in CBOT grain futures seen in
recent sessions appeared to find a low point for now.
However, longer-term trends suggest that further drops may be in
store, said Tomm Pfitzenmaier of Summit Commodity Brokerage in a
note. "The outside markets are mixed with lower equity prices and a
stronger dollar," he said.
The U.S. Dollar index on the ICE was virtually unchanged this
Falling Back: Daily production of ethanol in the U.S. dropped
again this week, falling to the lowest it has been since late
April. In its latest weekly report, the EIA said that daily ethanol
production fell to 983,000 barrels per day for the week ended Aug.
12, which is down from 1.022 million barrels the previous week.
It is the first time since May that daily ethanol production has
been below the 1 million barrel-per-day mark, and the lowest daily
production has been since April.
Inventories rose, meanwhile, climbing to 23.45 million barrels,
which is up from 23.26 million barrels reported last week.
Potential Upside: Grain traders surveyed by The Wall Street
Journal are forecasting that grain export sales may perk up this
week, this after being low in recent weekly reports.
Traders forecast that wheat export sales may rise to as high as
600,000 metric tons, corn to as much as 1 million tons, and
soybeans to as much as 800,000 tons.
If sales do go to these high ends, then it will be in some cases
more than double sales reported last week.
Staying the Course: Farmland prices are continuing to climb,
even after passing through record levels over the past year.
In Illinois, acres are averaging $8,950 per acre, a record high
and 13% higher than last year, according to USDA data.
The uptick in land values matches high commodity prices, but
easing prices in the coming years along with higher interest rates
may tame the record values.
"Farmland returns could fall, and corn and soybean prices are
the most likely cause of those declines," said professors with the
University of Illinois in a note.
-- The USDA is scheduled to release its weekly export sales
report at 8:30 a.m. EDT Thursday.
-- The USDA is due to release its monthly Cattle on Feed Report
at 3 p.m. EDT Friday.
-- The CFTC is scheduled to release its weekly commitments of
traders report at 3:30 p.m. EDT Friday.
-- Deere & Co. is due to release its third-quarter earnings
report on Friday.
Write to Kirk Maltais at firstname.lastname@example.org
(END) Dow Jones Newswires
August 17, 2022 15:14 ET (19:14 GMT)
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