Wheat Higher as World Crop Looks Smaller -- Daily Grain Highlights
By Kirk Maltais
--Wheat for September delivery rose 1.5%, to $7.10 3/4 a bushel,
on the Chicago Board of Trade on Wednesday, amid projections that
the amount of wheat in the world looks to be smaller.
--Corn for December delivery rose 0.5%, to $5.68 1/2 a
--Soybeans for November delivery rose 0.1%, to $13.89 3/4 a
Shrinking Crop: Declines to the world's wheat crop due to dry
weather are helping pull prices higher--and much of the focus is on
what's happening with the Russian crop. "The Russian crop estimates
seem to be still sliding slightly downward," said Charlie
Sernatinger of ED&F Man Capital. "The Russian farmer seems to
be tight fisted this summer, as he is unhappy with how much of his
price the state has peeled off for itself in the form of export
taxes. This is still about the supply side, not the demand side."
Russia is the world's biggest exporter of wheat, and is often the
main driver of prices globally.
In The Driver's Seat: The weather in U.S. growing areas
continued to be a main driver for price movement on the CBOT
overall. "Weather remains the primary driving factor in price
discovery at the present time," said Karl Setzer of AgriVisor.
"Corn is still pollinating across much of the United States and
ears are being set and starting to fill. As this takes place some
agronomists claim yield can be greatly impacted. The same is true
on soybeans where pod setting and filling is starting to take
place." Above-normal temperatures are expected in U.S. growing
areas over the next two weeks, according to DTN.
Sales Slump: Export sales of U.S. soyoil have been negative in
the past two weeks of USDA reporting, and are forecast to be low
again this week, according to grains traders surveyed by The Wall
Street Journal. Traders forecast sales to be anywhere from a
reduction of 4,000 metric tons to sales of 10,000 tons. Last week,
the USDA reported that outstanding soyoil sales had been reduced by
900 tons, and by 400 tons the week before that. After plummeting
last month, soyoil futures on the CBOT had been on the upswing, but
finished down in trading today, by 2%, to 62.65 cents per pound. In
turn, a lack of support from soyoil put pressure on soybean futures
Ethanol Inventories Soar: Inventories of ethanol in the U.S.
climbed this week, well above the expectations of analysts. In the
EIA's latest report Wednesday, inventories of U.S. ethanol rose
1.38 million barrels to 22.52 million barrels for the week ended
July 16. That's well above the expectations of analysts surveyed by
Dow Jones this week, who expected inventories to be anywhere from
20.1 million barrels to 21.23 million barrels. Meanwhile,
production fell 13,000 barrels per day to 1.028 million barrels per
day--which is a bigger decline than expected by analysts. Analysts
had forecast production to be anywhere from 1.036 million barrels
to 1.061 million barrels.
Marching On: The European harvest of grains, mainly wheat, is
moving forward this week. "Harvesting is not surprisingly behind
last year, but the more favourable conditions are now allowing
harvesting to progress," said AgriTel. "The first echoes seem to be
satisfactory for the moment on the quality of the harvested
cereals, despite some local disappointments. French operators are
obviously paying close attention to this point because the
2021/2022 campaign should lead, with the production volumes
expected in Europe, to see an increase in export activity."
--The USDA will release its weekly export sales report at 8:30
a.m. ET Thursday.
--The USDA will release its monthly cold storage report at 3
p.m. ET Thursday.
--The USDA will release its monthly livestock slaughter report
at 3 p.m. ET Thursday.
Write to Kirk Maltais at email@example.com
(END) Dow Jones Newswires
July 21, 2021 14:52 ET (18:52 GMT)
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