Wheat Futures Fall on Russian Competition -- Daily Grain Highlights
04 February 2023 - 08:01AM
Dow Jones News
By Kirk Maltais
--Wheat for March delivery fell 0.5%, to $7.57 a bushel on the
Chicago Board of Trade Friday in response to tough competition from
cheap and plentiful wheat exports from Russia.
--Soybeans for March delivery fell 0.2% to $15.32 a bushel.
--Corn for March delivery rose 0.3% to $7.60 a bushel.
HIGHLIGHTS
Cheap Cut: Pressure from cheap prices for Russian exports
weighed down CBOT wheat futures Friday - particularly confirmation
that Egyptian buyers purchased Russian wheat at a price of roughly
$322 per metric ton, reported to be the cheapest offer. "Russia has
a large production and is undercutting most world prices in the
international market," said Jack Scoville of Price Futures Group in
a note. "The demand for U.S. wheat in international markets has
been a disappointment all year and has been hindered by low prices
and aggressive offers from Russia."
Getting Better: The Buenos Aires Grains Exchange reported this
week that Argentina's soybean crop conditions improved, with the
portion of the crop that's in good or excellent condition rising
five percentage points from the previous week to 12%, while corn
quality climbed 10 percentage points to 22%. DTN forecasts that
Argentina crops are expected to stay dry over the next 10 days,
this while temperatures climb. The improved crop conditions were a
source of pressure for soybeans today.
INSIGHT
Strained Relations: The alleged Chinese spy balloon found
floating over Montana has grain traders worried about the fallout
in diplomatic relations between China and the U.S. "The Chinese
surveillance balloon deepens the deteriorating US/China
relationship, which could adversely impact ag trade," said
AgResource in a note. In recent years, the strain between the U.S.
and China has resulted in increased scrutiny over China's appetite
for U.S. grain exports, particularly soybeans, and its importance
to the U.S. ag economy.
Focal Point: Next week's WASDE report from the USDA is being
eyed by grain traders as a source of clarity for how the South
American crop situation is shaping up. "Grain and oilseed traders
still have concerns about drought-shortened corn and soybean crops
in Argentina, and harvest delays in Brazil," said Arlan Suderman of
StoneX in a note. Analysts surveyed by The Wall Street Journal are
forecasting a 4 million metric ton drop in both Argentine corn and
soybean output. However, traders are predicting that the WASDE will
show slightly higher corn and soybean production from Brazil.
Releasing Pressure: Food prices have fallen for the tenth month
in a row, as higher exports of wheat from Russia and Australia ease
inflationary pressures, a report published Friday by the Food and
Agriculture Organization of the United Nations said. The FAO's
food-price index, a closely watched barometer of global food
prices, averaged 131.2 points in January 2023, down 1.1 points or
0.8% from December's reading. Prices are now down 17.9% from the
peak in March, when the index hit an all-time high of 159.7 points
following Russia's invasion of Ukraine.
AHEAD
-The USDA will release its weekly grains export inspections
report at 11 a.m. ET Monday.
-Green Plains Inc. will release its fourth-quarter earnings
report at 6:30 a.m. ET Wednesday.
-Ingredion Inc. will release its fourth-quarter earnings report
before the stock market opens on Wednesday.
-Bunge Ltd. will release its fourth-quarter earnings report
before the stock market opens on Wednesday.
--The EIA will release its weekly ethanol production and stocks
report at 10:30 a.m. ET Wednesday.
-The USDA will release its monthly world supply-and-demand
report at noon ET Wednesday.
Yusuf Khan contributed to this article
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
February 03, 2023 15:46 ET (20:46 GMT)
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