Wheat Futures Rise as Traders Square Up Positions
18 September 2019 - 9:09PM
Dow Jones News
By Kirk Maltais
--Wheat for December delivery gained 1.1% to settle at $4.89 1/2
a bushel on the Chicago Board of Trade on Wednesday in what was
viewed as a technical move.
--Corn for December delivery rose 0.9% to $3.71 1/4 a
bushel.
--Soybeans for November delivery eased 0.6% lower to $8.88 3/4 a
bushel.
HIGHLIGHTS
Bleak Future: U.S. wheat doesn't look to have a strong argument
for rising any further for the rest of the year, said John Payne of
Daniels Trading. "I think it's just short-covering," Mr. Payne said
of Wednesday's uptick. "The speculators are just cleaning up their
positions. There's no bullish driver there." Overseas demand isn't
a factor, with U.S. prices far higher than foreign alternatives, he
said.
Streak Broken: Three straight days of large U.S. soybean export
purchases by Chinese buyers came to an end Wednesday, indicating
that Beijing is more interested in seeing how talks play out before
making any more goodwill buys. This approach inspired little
enthusiasm from traders, who have seen this scenario repeated
several times this year without any adequate conclusion.
INSIGHT
Ethanol Plant Shuts: Another ethanol plant is calling it quits,
at least for now, blaming Trump administration energy policies.
Siouxland Energy Cooperative, based in Iowa, this week moved to
idle its 30 million-gallon-a-year plant, citing exemptions granted
by the EPA to oil refineries, which Siouxland board President Kelly
Nieuwenhuis said reduced ethanol demand. Siouxland isn't among the
biggest U.S. ethanol plants, but it's the latest in a string of
closures that some in the ethanol industry say could cost Farm Belt
votes for President Trump next year.
And This Is Why: Ethanol inventories resumed their climb in the
past week, even while production fell. Inventories rose by 739,000
barrels to 23.238 million barrels Wednesday, while production fell
by 20,000 barrels per day to 1.003 million barrels per day. For a
corn market concerned about falling demand, these statistics are a
bearish indicator.
Brazilian Weather: Traders are watching the weather in
soybean-growing nations for any hiccups that would constrict world
supply and push prices higher. This is looking unlikely in Brazil,
which the USDA expects will nudge ahead of the U.S. in soybean
production this year. "The chances for rainfall in northern Brazil
have improved," said Tomm Pfitzenmaier of Summit Commodity
Brokerage.
AHEAD
--The USDA will release its latest weekly export sales numbers
at 8:30 a.m. EDT Thursday.
--The USDA releases its monthly Cattle On Feed report at 3 p.m.
EDT Friday.
--The CFTC will release its weekly commitment of traders data at
3:30 p.m. EDT Friday.
--Jacob Bunge contributed to this article.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
September 18, 2019 15:54 ET (19:54 GMT)
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