Wheat Futures Rise on Foreign Supply Bottlenecks
Wheat for May delivery rose 3.3% to $5.79 3/4 a bushel on the Chicago Board of Trade on Wednesday, in anticipation of more interest in U.S. wheat exports as competitors in the EU experience coronavirus-related supply-chain issues. Corn for May delivery rose 0.7% to $3.49 3/4 a bushel. Soybeans for May delivery fell 0.5% to $8.82 1/2 a bushel.
After taking a break Tuesday, wheat again led grain futures higher. "The market remains in a steep uptrend as 'ownership' of a little extra inventory of food commodities is providing significant support," RJO Futures said. Supply bottlenecks in the EU are making countries interested in stocking up on wheat seek other sources, such as the U.S., RJO said. Also helping is the easing of the U.S. dollar against other currencies, with the WSJ Dollar Index falling 1.5% this week.
Coronavirus Timing May Be a Boon for US Grains -- Market Talk
14:31 ET - China's recovery from the coronavirus pandemic may prove to be at just the right time for US grains exports. "Exports and everything could start to go," says John Payne of Daniels Trading. According to Payne, China's slowdown in coronavirus casualties mean that a pent-up demand for grains may soon come from there--something US grains can soon benefit from, especially as other nations like Brazil and the EU struggle with supply-chain issues amid burgeoning coronavirus cases. (email@example.com; @kirkmaltais)
Investors Start To Game Out Tough 2Q for Restaurant Chains -- Market Talk
1606 ET - How ugly could comparable-sales figures at fast-food chains get for 2Q as the coronavirus ripples through more countries? Analysts at Baird say they are currently modeling a 30% global comp-sales plunge for McDonald's for the period, though the US performs better under their assumptions (at -25%) than some international markets. Almost all of the hamburger company's US stores are currently only offering drive-through options, delivery or carry out. Operations are crimped in many other markets too. (firstname.lastname@example.org; @MicahMaidenberg)
STORIES OF INTEREST:
Food Manufacturers Raise Factory Pay
Some food manufacturers are raising pay for workers in their factories, warehouses and delivery fleets that they are counting on to maintain production at a time of sky-high demand.
Cargill Inc., PepsiCo Inc., Hormel Foods Corp., Kraft Heinz Co., Campbell Soup Co. and Danone SA are among companies that have agreed to higher wages and paid sick leave or child-care stipends for certain employees, according to the companies.
Ethanol Production Takes a Dive -- Market Talk
13:39 ET - Ethanol production in the US is on the decline this week--falling 30,000 barrels a day to just over 1M barrels a week, according to the EIA. The fall was expected by grains traders, with bigger declines expected in the coming weeks as ethanol producers continue to shutter their operations in the face of poor margins making production unprofitable. "The decline was as expected with big closures/drops in production coming in the weeks ahead," AgResource says. Ethanol stockpiles are also down this week, dropping 458,000 barrels to 24.1M barrels. Corn futures gain 0.9%. (email@example.com; @kirkmaltais)
OJ Futures Spring Up in Reaction to Grocery Store Rush -- Market Talk
10:05 ET - Orange juice futures on the Intercontinental Exchange are up for the fifth consecutive session, with the contract at its highest level since August. OJ futures have risen over 22% in that time period, in reaction to consumers stocking up on orange juice in the coronavirus panic. "Stay at home US consumers have been stocking up on frozen orange juice and the rally this past week has been the most aggressive since 2015," says Ole Hansen of Saxo Bank. (firstname.lastname@example.org; @kirkmaltais)
Livestock Futures Finish Lower -- Market Talk
15:15 ET - Livestock futures on the CME have finished the day lower, but traders expect that demand for meat will remain strong for the foreseeable futures as coronavirus wreaks havoc on global health. "I think demand for beef, pork, and poultry will be strong for the rest of the year," says Craig Turner of Daniels Trading. "I think the back end of cattle is a good value on the breaks." Live cattle futures finished the day down 0.7% to 96.325 cents per pound, while lean hogs futures finished down 1.7% to 71.75 cents per pound. (email@example.com; @kirkmaltais)