Corn Falls on Weekend Rainfall
14 June 2021 - 9:02PM
Dow Jones News
By Kirk Maltais
-- Corn for July delivery fell 3.7% to $6.59 1/4 a bushel on the
Chicago Board of Trade Monday in reaction to rainfall hitting U.S.
growing areas over the weekend.
-- Soybeans for July delivery fell 2.4% to 14.72 1/4 a
bushel.
-- Wheat for July delivery fell 0.9% to $6.74 1/2 a bushel.
HIGHLIGHTS
Weather Relief: Grain futures trading on the CBOT turned sharply
lower Monday in response to wetter and cooler conditions across the
U.S. Midwest.
"The National Weather Service shows above-normal rains and
average temperatures across the Midwest in the 8- to 14-day range,"
said Terry Reilly of Futures International. Grain traders will
likely make most of their decisions based on any changes to the
forecast this week, he said.
See You in Court: Reports Friday that the Biden administration
may provide some kind of relief for oil refiners from laws
mandating biofuel blending continued to be a point of pressure for
grain futures Monday.
This, combined with worries about weather supporting strong
crops has futures lower Monday, said Arlan Suderman of StoneX.
If the Biden administration pushes forward with relief for oil
refiners, then it will run counter to court decisions that struck
down the Trump administration's usage of waivers for small oil
refineries, allowing them to circumvent requirements for the amount
of ethanol blended into their gasoline.
Soy Selloff: Soybean futures found their lowest levels since
late April -- and haven't traded this low since April 23 -- with
the contract falling over 7% in the past four trading sessions.
Traders sold roughly 13,000 contracts of soybeans through midday
Monday, according to AgResource. The main factors pushing soybeans
and other grains lower are Midwest rainfall and anxiety over the
Biden administration's possible moves to provide relief for oil
refinery blending mandates.
INSIGHTS
Paring Back Bets: Fund traders continued to pull back on long
positions in corn in the past week, according to the latest data
from the CFTC. In the latest commitments of traders report released
after the close of trading Friday, CFTC figures showed managed
money funds had reduced corn long positions by just over 7,000
contracts for the week ended June 8, bringing the net position to
nearly 278,000 contracts. The data show that traders continue to
backtrack from holding a record-size long position in corn over
recent months.
"Since the April peak it has been cut by one-third," said Ole
Hansen of Saxo Bank.
Watching and Waiting: Grain futures were sharply lower, with
traders shedding weather premium amid rainfall in growing areas
over the weekend.
However, Monday's crop progress report from the USDA, due after
the market closes, may cause a shift in momentum.
"This afternoon's weekly crop condition report will be watched
closely to see if the dry conditions in some key states is starting
to take a toll on the crop," said Tomm Pfitzenmaier of Summit
Commodity Brokerage. "You do not have to talk to many farmers in
those areas to learn that the heat and lack of rainfall is still
sharply reducing their yield potential."
While many areas have received rain, other growing areas have
been largely missed by rains, something Monday's report may
reflect.
Missing the Mark: Export inspections of U.S. soybean exports
fell this week, dropping below both last week's figure and exports
from this time last year. Export inspections of U.S. soybeans
totaled 128,092 metric tons for the week ended June 10, according
to the USDA. That's down from 239,384 tons inspected last week, and
from 435,469 tons inspected at this time last year.
After being a strong buyer of U.S. soybeans earlier this year,
China's presence on the export market has diminished, with less
than 3,000 tons of soybeans inspected for shipment there for the
week.
AHEAD
-- The EIA is scheduled to release its weekly ethanol production
and stocks report at 10:30 a.m. EDT Wednesday.
-- The USDA is due to release its weekly export sales report at
8:30 a.m. EDT Thursday.
-- The CFTC is scheduled to release its weekly commitments of
traders report at 3:30 p.m. EDT Friday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
June 14, 2021 15:54 ET (19:54 GMT)
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