Posted on June, 9, 2022 at 10:04 am
Corn for July delivery rose 1% to $7.64 1/2 a bushel on the Chicago Board of Trade Wednesday, with traders looking at forecasts for the jet stream to determine the growing conditions for the freshly-planted crop.
--Soybeans for July delivery rose 0.7% to $17.40 a bushel.
--Wheat for July delivery rose 0.3% to $10.74 3/4 a bushel.
HIGHLIGHTS
Gone With The Wind: Grain traders are watching for how weather patterns develop in the U.S. later this month, attempting to get a sense of how the growing season will proceed over the summer. "Traders are increasingly focused on next week's anticipated changing weather pattern, " said Arlan Suderman of StoneX in a note. The jet stream's movement over the next week is expected to lock in hot and dry conditions in the Midwest, with precipitation more active on the west and east coasts of the U.S. - which may stress the corn crop in particular.
Strong Fundamentals: Most-active soybean futures neared an all-time record close of $17.68 per bushel for the continuous contract today. Fundamentals support the move higher, said Tomm Pfitzenmaier of Summit Commodity Brokerage in a note. "The market is dealing with a tight cash trade, strong domestic crush demand and weather uncertainty along with exports that have already surpassed the USDA's projections," said Mr. Pfitzenmaier. However, he adds, grain traders may engage in profit-taking ahead of Friday's WASDE report, with volatility likely to extend after the monthly report is released.
INSIGHTS
Heads Up: Even with the USDA often waiting until the release of the June 30th acreage report to update its outlook for how farmers fared during the planting season, Friday's WASDE report may contain an updated outlook on how many acres have been planted. "It would not be unprecedented for the June WASDE to cut acres before getting confirmation from NASS," said Marex in a note. The firm forecasts the WASDE may show a 500,000-acre decrease to corn plantings. In March's planting intentions report, the USDA had forecast corn plantings to total 89.5 million acres. Wheat was estimated at 47.4 million acres, up from last year.
Running Out of Space: Ukraine's grain storage is likely to be 20-25 million metric tons short in the coming year, according to Nikolay Gorbachov, president of the Ukrainian Grain Association. Speaking at the International Grains Council conference in London, Ukraine is likely to produce 65 million tons of grains and oil seeds, but with a storage capacity of 50 million tons and roughly 20-30 million tons in storage already, there is likely to be 20-25 million tons of excess grain unable to be stored, with exports currently limited. Mr. Gorbachov added that exports are now currently limited to 1.5-2 million tons via river and land routes.
Looking for Increases: Export sales of U.S. grains are expected to climb in this week's report from the USDA, according to grain traders surveyed by The Wall Street Journal. Traders forecast that corn sales may go as high as 900,000 metric tons for the week ended June 2, versus 234,500 tons reported last week. Meanwhile, soybean sales may go as high as 1.1 million tons versus 395,600 tons last week, and wheat sales may go up to 500,000 tons, versus 364,200 tons last week. China's reopening from Covid-19 lockdowns has been expected to spur higher sales, while export bans elsewhere globally have been expected to drive more demand towards U.S. exports.
Source: MarketScreener