Corn Rises as Black Sea Blockade Continues -- Daily Grain Highlights
27 May 2022 - 9:15PM
Dow Jones News
By Kirk Maltais
--Corn for July delivery rose 1.6% to $7.77 1/4 a bushel on the
Chicago Board of Trade Friday, with Russia unwavering in its demand
to lift sanctions in exchange for allowing Ukrainian grain
shipments to pass through its blockade of Black Sea ports.
--Wheat for July delivery rose 1.3% to $11.57 1/2 a bushel.
--Soybeans for July delivery rose 0.3% to $17.32 1/4 a
bushel.
HIGHLIGHTS
Port Pile-Up: Corn and wheat futures today were supported by the
continuing blockade of Ukrainian ports. Russia has demanded the
dropping of some sanctions in exchange for allowing Ukrainian grain
shipments to leave Black Sea port--but Ukrainian officials have
expressed skepticism at such an agreement and western nations
generally reject Russia's terms. "Traders are back to adding risk
knowing that Russia has decided to prevent Ukrainian grain from
being exported," said AgResource in a note. The firm adds that fund
traders are estimated to have bought 3,000 contracts of wheat,
7,600 contracts of corn, and 6,500 contracts of soybeans.
Playing it Safe: Traders opted Friday not to be on the short
side of the long weekend. "Pre-Holiday trade [is] seeing spring
wheat-led and canola-led buying, likely assuming that crop progress
numbers in the U.S. next Tuesday will continue to show a big gap in
Northern Plains planting versus 2021," Michael Zuzolo of Global
Commodity Analytics told the WSJ. Adverse weather elsewhere in the
world is also pushing traders to buy, Mr. Zuzolo added. "In a
nutshell, it would seem that weather and supply concerns remain
important because the trade realizes that the northern hemisphere
crop is far from being 'made;' as a result, the trade probably
doesn't want to be too short heading into the holiday weekend," he
said.
Ban Lifted: Soyoil futures fell 1.8% Friday, with the drop
adding pressure to soybeans while other grains were higher. The
move came after the Indonesian government said the country will
allow roughly 1 million metric tons of palm oil to be exported, a
change in policy from an export ban that began three weeks ago.
There are limited details about Indonesia's next moves, Terry
Reilly of Futures International said in a note.
INSIGHTS
Fingers Crossed: Weather conditions over the long weekend are
seen as supportive for any planting not yet done, according to
research firm DTN--with rainfall taking place in parched areas of
the western Corn Belt. Tuesday's Crop Progress report from the USDA
will be closely watched to see if farmers are able to get most of
their leftover planting done this weekend.
Food Security: Agriculture Secretary Tom Vilsack will address
issues with the U.S. food supply chain in a speech next week, the
USDA said Friday. Mr. Vilsack will lay out the framework the agency
will utilize to strengthen the supply chain--which has been
disrupted by Covid-19 as well as other issues. Last year, the USDA
said that it would invest $4 billion aimed at these concerns. "The
address will underscore USDA's commitment under the Biden-Harris
Administration to increase competition, bolster access to healthy,
affordable food, ensure growers and workers receive a greater share
of the food dollar, and advance equity as well as climate
resilience and mitigation," the agency said.
AHEAD:
--The Chicago Board of Trade will be closed in observance of
Memorial Day on Monday.
--The USDA will release its monthly agricultural prices report
at 3 p.m. ET Tuesday.
--The USDA will release its weekly crop progress report at 4
p.m. ET Tuesday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
May 27, 2022 16:00 ET (20:00 GMT)
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