By Kirk Maltais
--Wheat for September delivery rose 1.4% to $5.36 1/2 a bushel on the Chicago Board of Trade on Wednesday, with hotter and drier weather seen in the Southern Plains expected to spread out throughout the rest of the Plains.
--Corn for December delivery rose 0.9% to $4.01 1/4 a bushel.
--Soybeans for November delivery rose 0.7% to $9.69 1/4 a bushel.
HIGHLIGHTS
Baking in the Sun: Rainfall is being seen in much of the eastern and central Corn Belt currently, but hot and dry conditions are sneaking into areas from the south, said the USDA in its latest agricultural weather report. Crops in the Southern Plains are feeling stress, and that's expected to expand across the Corn Belt in the next two weeks as above-average temperatures cover the rest of the Plains and some of the eastern Corn Belt. Wheat crops will be most affected by this turn.
Breaking the Chain: Soybean futures posted a turnaround today after soybeans shed 7.5% in six consecutive sessions. "Given that the market is quite oversold and the momentum indicators have turned back higher, we may have seen the lows for soybeans for the time being with a little short covering and profit taking supporting prices." said Tomm Pfitzenmaier of Summit Commodity Brokerage in a note. Pfitzenmaier adds that new demand for exports from China will likely be needed to sustain a rebound, with the path of least resistance otherwise lower.
INSIGHT
Good Showing: Demand for U.S. ethanol has been strong this summer, said Scott Richman of the Renewable Fuels Association - saying that year-round of E15-blended motor fuel -- gasoline mixed with 15% ethanol -- has supported higher domestic consumption, as well as a 41% uptick in export sales versus this time last year. At the same time, lower corn prices are supportive for ethanol producers this year. "Moderating corn prices have helped keep ethanol highly competitive in the fuel market while also sustaining processing margins," said Richman. Average daily production hit an all-time high of 1.109 million barrels a day at the end of July, according to EIA data.
The Big Picture: The ever-growing prospect of an interest rate cut in September, which many investors see as more likely after today's CPI report showed the lowest inflation rate since 2021, is expected to only provide limited support for CBOT grains going forward. "I think until harvest, grains will have a tough time to get off these levels regardless of the macro trade," said John Payne of Advance Trading. That's despite the sentiment among many traders that grain futures are oversold--but unless crop weather turns significantly harsh in the coming weeks, many traders don't foresee a large uptick ahead for grains. The S&P 500 is higher today in reaction to the July CPI.
Expecting a Tumble: Export sales of U.S. soybeans for the week ended Aug. 8 are expected to pull back, according to analysts surveyed by The Wall Street Journal. They forecast exports to be anywhere from 500,000 metric tons and 1.3 million tons. Even if sales hit the high-end of forecasts, they would still fall just short of the 1.31 million tons that were reported sold in last week's data. China was the leading soybean buyer last week, and traders hope that their appetite continues.
AHEAD
--The USDA will release its weekly export sales report at 8:30 a.m. ET Thursday.
--Deere & Co. will release its third-quarter earnings Thursday with a call scheduled at 10 a.m. ET.
--The CFTC will release 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
08-14-24 1602ET
