Grain Futures Rise on Rainy Forecast
22 March 2019 - 6:43AM
Dow Jones News
By Francesca Fontana
--Wheat contracts for May delivery rose Thursday, gaining 0.4%
to $4.66 1/2 a bushel at the Chicago Board of Trade as traders
anticipate a rainier-than-usual 2019.
--Soybean contracts for May delivery increased 0.5% to $9.10 1/2
a bushel.
--May corn contracts rose 1.3% to $3.76 1/4 a bushel.
HIGHLIGHTS
Export Sales: The U.S. Department of Agriculture announced
weekly export sales for corn and wheat that were on the low side of
trade estimates and soybean sales that missed trade expectations
during the week ending March 14. Meanwhile, China bought 3,000
metric tons of U.S. pork, making the country the second-largest
buyer of the week.
Weather: The National Oceanic and Atmospheric Administration's
forecasts released Thursday morning confirm wetter-than-normal
weather to come in the weeks ahead as well as through the year.
INSIGHT
Corn Demand: Rich Nelson of Allendale says that the prospects of
China buying more U.S. pork could help prop up corn prices as well.
"If we start exporting a lot of pork to China, that's bullish for
feed demand (in the U.S.)," Mr. Nelson said. "The data suggests
that ASF [African swine fever] has removed more than 30% of China's
hog production in a short period of time...Removing hundreds of
millions of hogs from China's food supply has significant
implications for China's need to import meat to feed its people,"
said Arlan Suderman of INTL FCStone.
Growing Season: Grain traders are becoming more concerned that
the wet weather will last through growing season, creating yield
problems as well as planting problems. "The weather gives us
uncertainty and calls into question previous yield forecasts," said
Dave Marshall of First Choice Commodities.
Crop Insurance: Record floods in the Midwest are prompting
concern over the Trump administration's proposal to slash billions
of dollars from a key farm-safety net program: crop insurance. Farm
groups are raising alarm over the administration's proposal in its
FY2020 budget to cut crop insurance funding by more than $22
billion over a decade, including by reducing crop insurance premium
subsidies the government pays to farmers. Devastating floods have
damaged farm buildings, equipment, infrastructure and crops,
according to the National Association of Wheat Growers, which says
farmers depend on the program to mitigate losses from natural
disasters. "Congress and the Administration should focus on how to
strengthen and improve crop insurance, not weaken a program that
many American farmers and ranchers rely on," said Ben Scholz, the
group's president.
AHEAD
--The CFTC will report its weekly commitments of traders data at
3:30 p.m. EDT on Friday.
--USDA releases its weekly grain export inspection figures at 11
a.m. EDT on Monday.
Write to Francesca Fontana at francesca.fontana@wsj.com
(END) Dow Jones Newswires
March 21, 2019 15:28 ET (19:28 GMT)
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