TOP STORIES:

Corn Rises as Funds Cover Shorts

Corn for July delivery rose 2.2% to $3.27 1/2 a bushel on the Chicago Board of Trade Thursday as some institutional traders opted to cover their sizable short positions in corn as EIA data shows improvement in ethanol production.

Grains traders, particularly managed money funds, opted to close their big short positions Thursday. This drove CBOT corn and wheat futures higher today. "It has been a big morning of volume at the CBOT with grain futures rising to sharp gains on technical buying and spread unwinding," said AgResource.

Sanderson Expects Lower Feed Grain Costs -- Market Talk

09:28 ET - Poultry producer Sanderson Farms says that it expects feed grain prices in 2020 to stay lower than they were in 2019 for the rest of the year. "There are ample supplies of both corn and soybeans worldwide, and the pandemic has had a material impact on demand for feed grain, especially corn used for ethanol," the company says in its earnings release. Sanderson cites the USDA crop progress reports as evidence of this--with corn planting progress at 88%, up from 55% at the same time last year. CBOT futures are mixed this morning, with corn up 0.4%, wheat gaining 0.5%, and soybeans down 0.3%. (kirk.maltais@wsj.com; @kirkmaltais)

STORIES OF INTEREST:

Soybeans Down as Traders Unsure About China Fallout -- Market Talk

09:13 ET - Soybean futures on the CBOT traded down 0.3% overnight, with grain traders unsure about how China's recent moves to override Hong Kong's autonomy will affect its relationship with the US and the Phase One trade agreement between the two nations. "Traders have had difficulty couching the political ramifications of China's legislative capture of Hong Kong, and what sanctions the US will apply?" says AgResource. Legislation passed by US Congress this week designed to sanction China for treatment of minorities, the Uyghur Human Rights Policy Act of 2020, may further stoke tensions between the two nations. "Whether these new US political sanctions will undermine the US/China Phase 1 Trade Agreement is unknown," says AgResource. (kirk.maltais@wsj.com; @kirkmaltais)

Oil Rises as Supplies at Storage Hub Decline -- Market Talk

14:57 ET - US oil prices rise 2.7% to end at $33.71/bbl as investors push aside a bearish rise in overall US inventories, and instead focus on a third straight decline in stockpiles at the US storage hub in Cushing, Okla., the delivery point for WTI. EIA says total US inventories of crude rose 7.9M bbls last week, compared to expectations in a WSJ survey for a 1.6M-bbl fall. But analysts say much of that increase was due to a surge in Saudi Arabia crude imports. At Cushing, stockpiles fell 3.4M bbls to just 53M, which is well below the 76M-bbl maximum working capacity, and that's allowing WTI prices to rise as an incentive to attract more barrels to the hub. (dan.molinski@wsj.com)

THE MARKETS:

Hog Futures Close Day Nearly Limit Down -- Market Talk

15:57 ET - Lean hog futures on the CME finish the day off 6.2%, or 3.65 cents per pound--close to the 3.75 cents per pound limit for the July contract. Hogs closed at 55.65 cents per pound, making it the lowest the contract has ended since April 30. The main drivers for the hog drop includes the big decline in pork cutout prices, as well as tensions between the US and China shaking trader hopes that China will continue to buy greater amounts of pork exports from the US this year. "A decline in wholesale values applied pressure to livestock futures today as well, even though the spread between futures and cash remains historically wide," says Karl Setzer of AgriVisor. Cattle futures finish trading up 0.5% to $1.01175 per pound. (kirk.maltais@wsj.com; @kirkmaltais)