Corn Rises on Expectations of Higher Export Demand
06 August 2020 - 5:59AM
Dow Jones News
By Kirk Maltais
-- Corn for December delivery rose 0.9% to $3.23 1/4 a bushel on
the Chicago Board of Trade Wednesday in anticipation of the USDA
reporting large export sales of corn in tomorrow morning's export
sales report.
--Wheat for September delivery rose 0.5% to $5.10 3/4 a
bushel.
--Soybeans for November delivery fell 0.3% to $8.78 3/4 a
bushel.
HIGHLIGHTS
Hot Commodity: Thanks to a report of a flash sale of nearly 2
million metric tons of corn by the USDA last week, grains traders
are expecting to see a sharp uptick in weekly corn export sales.
Grains traders tell The Wall Street Journal that they expect corn
sales to land anywhere from 2 million to 3 million tons for the
week ending July 30. A figure falling in between those two amounts
would dwarf the 609,400 tons of corn reported for the week ending
July 23.
Back to Business: After a brief respite, China is back in the
U.S. export market, giving CBOT soybean futures a lift Wednesday.
China purchased 192,000 metric tons of US soybean exports for
delivery in the 2020/21 marketing year, the USDA said -- the first
sale announced to China since the USDA announced a nearly 2 million
metric ton sale of corn to China on July 30. The announcement of a
new sale to China comes at a tense time. "Political tensions are
high between the U.S./China with Trump Administration China hawks
seeing the blaming of China for the coronavirus as helping Trump's
reelection," said AgResource.
INSIGHTS
Roadblocks: Ethanol production in the U.S. is down this week,
dropping 27,000 barrels per day to 931,000 barrels per day. This is
down 10.5% from the same time last year, and a sign that the
economic recovery from the coronavirus pandemic has stumbled.
Meanwhile, ethanol inventory in the U.S. rose 74,000 barrels to
20.35 million barrels. Corn futures trading on the CBOT are up
today, by 0.6%. However, they've been on a downtrend amid signs of
economic recovery being stunted, as well as signals foretelling
this year's bumper crop.
Negative Numbers: Farmer returns are expected to stay negative
this year, even with the addition of aid payments from the U.S.
government, according to the University of Illinois' Department of
Agricultural and Consumer Economics. In the projected balance sheet
for farmers in northern and central Illinois, farmer returns for
corn are expected to be minus $30 per acre, growing to minus $75
per acre in 2021. This is with an average price of $3.25 per bushel
in 2020, and $3.40 in 2021. Meanwhile, soybeans are projected to
give farmers a profit of $19 per acre in 2020 - falling to a loss
of $50 per acre in 2021.
AHEAD:
--Animal vaccine producer Zoetis Inc. releases its
second-quarter earnings before the market opens Thursday.
--The USDA will release its latest weekly export sales numbers
at 8:30 a.m. ET Thursday.
--The CFTC releases its weekly commitment of traders report at
3:30 p.m. ET Friday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
August 05, 2020 15:44 ET (19:44 GMT)
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