Wheat Futures Slide on WASDE Caution -- Daily Grain Highlights
WASDE Caution Dents Wheat Futures - Grain Highlights
The price of wheat scheduled for delivery in December dropped by 1.5% to $5.99 3/4 per bushel on Thursday, as observed on the Chicago Board of Trade. Traders were being careful due to a range of uncertain predictions for the upcoming WASDE report.
Soybeans for November shipment experienced a decline of 1.2%, reaching a price of $13.59 1/2 per bushel.
--The price of corn for December delivery increased slightly by 0.1%, reaching $4.86 1/4 per bushel.
Running the Full Range: The upcoming WASDE report from the USDA was the main topic of concern for traders today, with a mixture of expectations about what the report might reveal. StoneX predicts that national corn yields will be 175 bushels per acre, resulting in a production of 15.102 billion bushels. For soybeans, they forecast yields of 50.1 bushels per acre, leading to an output of 4.144 billion bushels. These numbers are lower than the estimates released by the USDA in August. However, other analysts predict an even sharper decline. Allendale Inc. forecasts corn production at 14.805 billion bushels with yields of 171.5 bushels per acre, and soybeans at 4.1 billion bushels with yields of 49.6 bushels per acre. The wide range of estimates made traders cautious during today's trading session.
Export Inquiries: The overall agreement among experts and traders is that there is a lack of demand for exports - which is causing pressure on the overall prices of grains. The strengthening of the U.S. dollar is not helping the competitiveness of grain exports, but experts surveyed by The Wall Street Journal this week predict that soybean sales until Aug. 31 will more than double compared to the previous week. This is attributed to a series of sudden sales to "unidentified locations" reported by the USDA at the end of last month. The term "unidentified locations" could refer to any country, but grain traders and experts often assume it to be China.
Unfavorable Timing: The possibility of reduced harvests for certain crops is rising due to hot and arid weather conditions. According to the U.S. Drought Monitor, areas experiencing dryness are getting worse in Minnesota, Iowa, and Wisconsin, with severe, extreme, and exceptional drought spreading in those regions. The situation is also worsening in East Texas and Louisiana, where extreme and exceptional drought is expanding. The process of harvesting typically leads to a significant influx of grains in both domestic and international markets. However, continuous high temperatures might dampen this flow. Ira Epstein from Linn & Associates cautions that the size and quality of the crop may deviate from expectations, as initial harvest outcomes can be misleading.
Farmers are feeling the impact of lower prices compared to earlier in the year, as well as consistently high costs for their resources. The Federal Reserve Bank of Minneapolis mentioned in their recent Beige Book report that some farmers are concerned that even though commodity prices are still somewhat favorable, they are decreasing and may not cover their expenses.
Increasing Slightly: The Energy Information Administration (EIA) reported that ethanol production and inventories in the United States made small gains in the week leading up to September 1. Ethanol inventories reached a total of 21.62 million barrels, experiencing a meager increase of 12,000 barrels compared to the previous week. Moreover, daily ethanol production saw a rise to 1.012 million barrels per day, only surpassing the prior week's figures by 5,000 barrels per day. According to a survey by Dow Jones, analysts were anticipating more significant shifts.
The United States Department of Agriculture (USDA) will publish its report on weekly export sales on Friday at 8:30 a.m. Eastern Time.
-The CFTC is scheduled to unveil its weekly Commitment of Traders report on Friday at 3:30 p.m. Eastern Time.
--At 11 a.m. ET on Monday, the USDA is scheduled to publish its weekly report on the inspections of grain exports.
The United States Department of Agriculture (USDA) is scheduled to publish its weekly update on crop growth advancements today at 4 p.m. Eastern Time (ET).
Contact Kirk Maltais by sending an email to [email protected].
(FINAL/CONCLUSION) Dow Jones Newswires
