By Kirk Maltais
--Soybeans for July delivery fell 1.4% to $8.35 a bushel on the Chicago Board of Trade on Thursday, with traders reacting to a lack of big U.S. grain export sales to China.
--Corn for July delivery declined 0.6% to $3.17 3/4 a bushel.
--Wheat for July delivery rose 0.4% to $5.16 a bushel.
Don't Let Me Down: Grains traders were disappointed that the USDA hadn't confirmed any new large purchases of U.S. soybeans by China this week. No such notices have been issued since last Thursday, crimping trader optimism that Chinese demand would support the U.S. soybean market. Some market watchers wonder if the lack of purchases is a signal of China-U.S. tensions brewing ahead of China's biggest political gathering of the year this week.
Here Comes the Sun: Also pressuring soybeans, and hitting corn, was the weekend weather outlook in the Farm Belt. "The 30- and 90-day forecasts indicate improved conditions for the U.S. growing season," Karl Setzer of AgriVisor said. Agricultural weather firm DTN forecasts temperatures in the Midwest will be near normal over the weekend, with scattered showers across the area, good news for farmers finishing corn planting and approaching the halfway point of soybean planting.
Tomorrow Never Knows: With managed money funds holding a net short position of more than 200,000 CBOT corn contracts, some traders are looking for prices to show a big jump once funds decide to start covering these shorts. The issue though, is when that covering might take place. "There will have to be a compelling reason for them to cover shorts, and that reason is not evident at this point," said Tomm Pfitzenmaier of Summit Commodity Brokerage.
Hello, Goodbye: China's general distrust of the global food system has gotten worse amid the Covid-19 pandemic, said Darin Friedrichs, senior Asia commodity analyst at INTL FCStone. He notes that two scholars at the Renmin University in Beijing put out a piece about soybean supply during the pandemic that mentioned risks of relying on international markets. Mr. Friedrichs said concerns about availability seem to be unfounded, as Brazil is doing massive record soybean exports and the U.S. doesn't rely on migrant labor to harvest soybeans. "But these ideas are still clearly getting traction in the market and in Beijing."
--The USDA will release its monthly Cattle on Feed report at 3 p.m. ET Friday.
--The CFTC releases its weekly commitment of traders report at 3:30 p.m. ET Friday.
--The Chicago Board of Trade will be closed on Monday in observance of Memorial Day, reopening Tuesday morning.
(Lucy Craymer contributed to this article.)
Write to Kirk Maltais at email@example.com