By Kirk Maltese
– Wheat for July delivery fell 0.5% to $10.85 3/4 a bushel at the Chicago Board of Trade on Thursday as grain traders wait to see how weather conditions in U.S. growing areas this weekend will affect farmers’ ability to plant.
— Soybeans for July delivery fell 0.5% to $16.84 3/4 a bushel.
— Corn for July delivery rose 0.2% to $8.13 1/2 a bushel.
Hands-off approach: Grain traders have taken a cautious approach, keeping futures movements minimal and volumes light. “They are waiting for Mother Nature/Supply-Side fundamentals to determine whether they, the market, should retain the current risk premium in the price of futures contracts,” Michael Zuzolo of Global Commodity Analytics told the WSJ. Rainfall is expected to continue across the US Midwest through the weekend. USDA’s upcoming Crop Progress report will show whether farmers have been able to catch up on their slow planting pace. Meanwhile, agricultural futures across the board are near all-time highs.
Solid demand: A large flash sale of US corn to China provided some support for corn futures prices. The USDA reported that 1.09 million metric tons of corn were sold to China for delivery in marketing years 2021/22 and 2022/23. 476,000 tons are expected to be delivered in 2021/22, while the remaining 612,000 tons are expected to be delivered in 2022/23. “Another large overnight corn selloff to China buoyed this market today,” StoneX’s Arlan Suderman said in a note. “The strong demand for old and new crop corn underscores the need to add acres to the US crop this year, with Ukraine being out of the market for the foreseeable future.
Potential consequences: Planting of spring crops in the United States is behind the usual pace and this could soon become a serious problem for corn yields – especially at a time when tight supplies meet strong demand. “History shows that there is a slowdown in the yield of corn planted after May 10,” AgResource said in a note. “[There’s] a risk of farmers planting maize acreage for other crops – namely soybeans. “For spring wheat in some regions, adverse weather conditions can spur prevent planting claims in states like North Dakota, AgResource said.
Supply chain hiccups: Grain shipments by rail continue to decline, according to the latest USDA Grain Transportation Weekly Report. The agency says US Class I railroads produced 19,602 grain cars for the week ended April 16. This is 19% less than the previous week, 25% less than last year and 14% less than the 3-year average. The decline in rail shipments comes as the government hears about the state of rail infrastructure in the United States, with deteriorating conditions slowing shipments.
– The USDA will release its monthly agricultural price report at 3 p.m. ET on Friday.
–The CFTC will release its weekly Trader Engagement report at 3:30 p.m. ET on Friday.
– The USDA will release its weekly grain export inspection report at 11 a.m. ET on Monday.
Write to Kirk Maltais at [email protected]
(END) Dow Jones Newswire