TOP STORIES:
Wheat Climbs on Fund Interest
Wheat for July delivery rose 2.3% to $5.23 3/4 a bushel on the Chicago Board of Trade Thursday, with managed money funds closing short positions as Russian prices continue to rise. Corn for July delivery rose 1.5% to $3.29 a bushel. Soybeans for July delivery rose 1.2% to $3.24 a bushel.
Managed money funds reacted to both higher Russian wheat prices and a weaker U.S. dollar by closing out their short positions en masse. Grains traders bought 9,100 contracts-worth--or 45.5 million bushels--of wheat futures Thursday, according to AgResource. "Wheat rallied hard today, pushed up by stronger Russian values, but principally on chart buying, as we tore through swing highs like a pit bull on a one eyed cat," said Charlie Sernatinger of ED&F Man Capital.
J.M. Smucker Anticipates Higher Commodity Prices -- Market Talk
13:41 ET - J.M. Smucker, maker of Jif peanut butter as well as Folgers and Cafe Bustelo coffee, has factored in higher commodity costs to its fiscal 2021 forecasts, Chief Financial Officer Tucker H. Marshall tells analysts on a conference call. The company's full-year guidance for adjusted earnings-per-share anticipates increased commodity costs for peanuts and unroasted coffee beans, Marshall says, and higher commodity costs are one focus of a new margin-management program, the company adds. Shares fall 4% to $109.72 following the company's F4Q results, which show higher 4Q revenue but forecast slightly lower sales in fiscal year 2021. (mattgrossman@wsj.com; @mattgrossman)
STORIES OF INTEREST:
Food Prices Fell for Fourth Consecutive Month in May But Rate of Decline Slowed
Global food prices continued their decline in May as the Covid-19 pandemic hit demand while supplies remained strong, the United Nations' Food and Agriculture Organization said Thursday.
The UN FAO's Food Price Index dropped to 162.5 points in May, a 1.9% fall from the previous month.
That marked the fourth consecutive monthly decline for the index which tracks the prices of common food commodities. However, the rate of decline slowed in May from April, suggesting the impact of the virus was waning.
China Can't Ignore US Soybeans -- Market Talk
10:24 ET - Despite various media reports saying the Chinese government has ordered purchases of US farm goods like soybeans to stop, the USDA has continued to announce large sales of US soybean exports this week. One reason is that China simply can't ignore US soybeans on a financial level, says Arlan Suderman of INTL FCStone. "The fact is, Brazil soybeans are getting expensive due to a strengthening [Brazilian Real] and rising cash basis, and China needs beans to fill the gap ahead of next year's South American harvest," says Suderman. July soybean futures on the CBOT are up 1.2% Thursday. (kirk.maltais@wsj.com; @kirkmaltais)
Rough Rice Futures Climb Extends -- Market Talk
13:25 ET - The climb of rough rice futures has extended for another day, with the July contract closing limit up of $1.50 per short ton at $22.065 per ton--a 7.3% uptick. That makes it 37.8% that the rough rice contract has risen since last Tuesday, when the streak began. "The most real and obvious reason is the Asian export demand which is up significantly over the past few weeks, with a fairly decent demand in the US from tight supplies seen as being very real over the next few months," says Josh Graves of RJO Futures. Additionally, drought conditions in Thailand has spurred buying of rice futures, Graves says--considering that Thailand is the fourth-largest producer of rice globally, according to USDA data. (kirk.maltais@wsj.com; @kirkmaltais)
THE MARKETS:
Livestock Futures Finish Higher on Weaker USD -- Market Talk
15:20 ET - Livestock futures finished higher, with CME lean hog futures up 0.2% to 53.575 cents per pound, while live cattle futures finished 0.6% higher at 97.925 cents per pound. A weaker US dollar is one factor that helped pull livestock futures higher, even if today's export sales report didn't show strong new sales activity for beef or pork. "Weekly export data was released this morning and there may have been a sigh of relief for what it did not contain -- more cancellations from China," says Steiner Consulting Group. New pork sales totaled 17,300 metric tons, while beef sales totaled 12,300 tons. (kirk.maltais@wsj.com; @kirkmaltais)
