Wheat Futures Stretch Gains as Russian Prices Rise
19 September 2020 - 5:54AM
Dow Jones News
By Kirk Maltais
--Wheat for December delivery on the Chicago Board of Trade on
Friday rose 3.4% to $5.75 a bushel, the highest close since March,
after an uptick in wheat prices out of the Black Sea area.
--Soybeans for November delivery rose 1.5% to $10.43 1/2 a
bushel.
--Corn for December delivery rose 0.9% to $3.78 1/2 a
bushel.
HIGHLIGHTS
Black Sea Cues: Russian wheat prices rose to $235 to $240 a ton,
according to AgResource. The grain has seen strong demand from
importers. In addition, "Black Sea farmers are reluctant to add to
cash sales amid severe dryness and as optimal winter-wheat-seeding
windows begin to close in early October," AgResource said.
Hot Pot Help: Soybean futures remained at more than two-year
highs, buoyed by strength in the vegetable oil market as well as
confirmation of more export sales to China. Rapeseed oil on the
Zhengzhou Commodity Exchange is being supported by the return of
large group dining in China such as hot pot restaurants, said Darin
Friedrichs, senior Asia commodity analyst at StoneX. Meanwhile, the
USDA confirmed Friday that China purchased 210,000 metric tons of
U.S. corn and 132,000 tons of soybeans. An additional 100,000 tons
of soybean meal was sold to unknown destinations, the USDA said.
Large sales of soybeans to China were reported by the USDA every
day this week.
To The Rescue: President Trump is allocating $14 billion in aid
for agricultural producers affected by Covid-19, the USDA said
Friday. The funds are on top of aid distributed to farmers under
the CARES Act. Payments will be based on 2020 planted acres of cash
crops including corn, wheat, soybeans, or maximum inventories of
livestock in the case of livestock producers.
INSIGHT
China Risk: Continued reports of large Chinese purchases by the
USDA has been the main driver for upward moves in grains futures
this week. Some traders project soybean prices could top $11 a
bushel. However, traders appear to be ignoring the possibility that
these purchases could dry up quickly, said Arlan Suderman of
StoneX. "Money flow is currently choosing to ignore the risks that
Chinese demand may fall short of their hopes, while choosing to
focus on bullish hopes," Mr. Suderman said.
AHEAD
--The USDA releases its weekly grain export inspections data at
11 a.m. ET Monday.
--The USDA releases its weekly crop progress report for the
2020/21 crop at 4 p.m. ET Monday.
--The USDA releases its monthly cold storage report at 3 p.m. ET
Tuesday.
--Lucy Craymer contributed to this article.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
September 18, 2020 15:39 ET (19:39 GMT)
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