Wheat Falls as World Weather Improves
23 May 2020 - 6:11AM
Dow Jones News
By Kirk Maltais
--Wheat for July delivery fell 1.4% to $5.08 3/4 a bushel on the
Chicago Board of Trade Friday, as traders closed long positions
amid indications of improving weather in wheat-growing areas.
--Soybeans for July delivery fell 0.2% to $8.33 1/4 a
bushel.
-- Corn for July delivery rose 0.1% to $3.18 a bushel.
HIGHLIGHTS
Dampened Mood: A rally in wheat futures overnight lost momentum
as visions of tighter supply conditions around the world crumbled.
"Rising temperatures and rains in the Corn Belt limit the bullish
potential for wheat and corn," said AgriTel. An uptick in French
wheat in good and excellent condition is also playing into trader
sentiment, as is a virtual crop tour held in Kansas this week
examining winter wheat crops - which showed some freeze damage but
generally healthier crops than expected.
Frayed Nerves: Heightened tensions between the US and China
pressured grains futures. "General commodity weakness has been seen
in China after the country lowered their growth targets and said
they would impose national security laws in Hong Kong," said Doug
Bergman of RCM Alternatives. With Memorial Day around the corner,
many grains traders reacted by simply staying off of the market
Friday.
INSIGHT
Soybean Stomach Ache: U.S. grain traders are nervous about
U.S.-China trade tensions heating up over the weekend and throwing
the Phase One trade deal into jeopardy. Also weighing on nerves are
indications that while China hasn't made any big purchases of US
soybeans in the past week, it has been buying them from Brazil. "No
one seems to know if the slow purchase pace is related to
U.S./China political wrangling or that China is being overwhelmed
by the massive arrivals of Brazilian soybeans, " said AgResource.
"A record tonnage of Brazilian soybeans are afloat to China that is
likely causing 'indigestion'."
Weekend Washout?: Rain is expected to hit crop-growing areas in
the Midwest this weekend, possibly making planting a little harder
while supporting emerging crops in other areas. "The rains will be
welcome in previously dry areas like Eastern Nebraska, which missed
out on the last round of rains," said Arlan Suderman of INTL
FCStone. "They will be less welcome in Illinois, which saw 3" to 4"
totals in some locations with the last system."
AHEAD:
--The Chicago Board of Trade will be closed on Monday in
observance of Memorial Day, reopening Tuesday morning.
--The USDA releases its weekly grain export inspections data at
11 a.m. ET Tuesday.
--The USDA releases its weekly crop progress report for the
2020/21 crop at 4 p.m. ET Tuesday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
May 22, 2020 15:56 ET (19:56 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.