Wheat Falls Amid Weak Export Sales -- Daily Grain Highlights
19 August 2022 - 5:33AM
Dow Jones News
By Kirk Maltais
-- Wheat for September delivery fell 4.2% to $7.48 a bushel on
the Chicago Board of Trade Thursday after the USDA reported
lower-than-expected export sales for U.S. wheat.
-- Corn for December delivery rose 0.5% to $6.15 a bushel.
-- Soybeans for November delivery rose 1.1% to $14.05 1/4 a
bushel.
HIGHLIGHTS
Poor Showing: The USDA reported that sales for the week ended
Aug. 11 totaled 207,200 metric tons, below trader forecasts.
"We had a marketing-year low in exports this [morning], at a
time when we should be having our best sales of the marketing
year," said Brian Hoops of Midwest Market Solutions.
Mr. Hoops told the WSJ that in addition to weak export sales,
wheat futures are also being pressured by the apparent success of
Ukraine's grain export corridor, with additional vessels being
launched.
Next Steps: A meeting Thursday between Ukraine, Turkey and the
United Nations that discussed the continuation of the Black Sea
grain export corridor, among other topics, contributed to pressure
on wheat futures. The Wall Street Journal reports that the meeting
discussed ways to protect Ukraine's shipments, along with other
security issues.
The Turkish defense ministry says that Ukraine has exported
622,000 tons of grain and other food products from the three ports
covered by the export agreement, with 43 ships having sailed under
the agreement.
CBOT wheat futures have generally been the strongest indicator
of trader sentiment surrounding the Russia-Ukraine conflict.
Lacking a Focus: Corn and soybeans moved higher on competing
factors, lacking a clear direction as some traders saw an
opportunity to buy futures at more affordable levels.
"The bull is struggling to find a story while the weather
forecast appears to support a mostly favorable environment for late
season development in the row crops," Brian Pullam of Linn and
Associates told the WSJ.
Mr. Pullam added that fund action did have influence on
supporting corn and soybeans Thursday.
"You cannot dismiss those funds who like to be bargain basement
pickers," he said. "Would not be surprised if we saw that again
today, with some fund or funds thinking grain prices just got too
cheap."
INSIGHTS
Open the Gates: This morning's export sales report from the USDA
showed China being a leading customer for U.S. corn and soybeans,
which has some traders wondering if China will be a larger presence
in future reports.
"This morning's USDA weekly export sales report indicates a
pickup of Chinese buying of U.S. corn and soybeans," said Arlan
Suderman of StoneX. "I see this more as hedging their bets against
the possibility of tightening global balance sheets than I do a
reflection of immediate need."
The buying comes as dry conditions severely damage Chinese
crops, Mr. Suderman notes.
Spreading the Wealth: Many crop-growing states have been and
will continue to receive rainfall this week.
Western areas of the Corn Belt have gotten rain, and that
precipitation is expected to travel eastward through the weekend,
said Terry Reilly of Futures International in a note.
"The Midwest west-central areas will see rain today Saturday
before moving into the east-central areas Sunday," Mr. Reilly
said.
The National Weather Service forecasts that above-normal
precipitation is expected in Kansas, Colorado and Missouri over the
next eight to 14 days, while North Dakota and Minnesota are
expected to receive below-normal rain.
AHEAD
-- The USDA is scheduled to release its monthly Cattle on Feed
Report at 3 p.m. EDT Friday.
-- The CFTC is due to release its weekly commitments of traders
report at 3:30 p.m. EDT Friday.
-- Deere & Co. is scheduled to release its third-quarter
earnings report on Friday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
August 18, 2022 15:18 ET (19:18 GMT)
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