By Kirk Maltais
--Wheat for September delivery fell 1.1% to $4.85 3/4 a bushel on the Chicago Board of Trade Wednesday, with traders selling off in reaction to rainfall expected to hit the Corn Belt in the latter half of the week.
--Soybeans for July delivery fell 0.5% to $8.70 3/4 a bushel.
--Corn for July delivery fell 0.2% to $3.24 1/4 a bushel.
HIGHLIGHTS
No Reprieve: Weather supportive for wheat crop growth world-wide continues to have its thumb on grains futures. Thunderstorms are expected throughout the Midwest for the rest of the week, according to agricultural weather firm DTN, which calls the weather pattern "favorable" for row crops. For grains traders, the rainfall kept selling pressure on grains today, particularly for wheat. "With the oversold condition of the market...the market looks set for a recovery bounce," RJO Futures said of wheat. "However, the upside does look limited unless there are serious weather issues that develop quickly for any of the world's key exporters."
Relapse: Markets are in general focused mostly on reports of increasing coronavirus cases in several states, including Texas and California. While grains showed only a limited reaction to this uptick in cases, grains traders were cautious about trading high volumes of soybeans and wheat--instead of opting to wait for the USDA's acreage and quarterly stock reports next week.
INSIGHTS
Up the Mountain: After a break last week, U.S. ethanol production is back to its recent recovery trend, rising another 52,000 barrels per day to 893,000 barrels per day, according to the EIA. It's the highest daily ethanol production has been in the U.S. since late March, and brings ethanol production closer to its yearly normal. Meanwhile, inventory of ethanol continues to shrink, down another 312,000 barrels this week to 21.03 million barrels--the lowest level since last December. This uptick provided corn futures with brief support Wednesday, although it soon faded amid the other factors moving prices.
Slight Falloff: Soybean export sales are expected to drop off slightly from the high totals of previous weeks, according to grains traders surveyed by The Wall Street Journal. Traders expect soybean export sales to total anywhere from 800,000 metric tons to 1.7 million metric tons. Even if sales come in on the high end of trader expectations, it would be the lowest new sales in nearly a month for soybeans. Soybean futures have been on a recovery course since May, due in part to the increased purchasing of soybean exports by China.
AHEAD:
--The USDA will release its latest weekly export sales numbers at 8:30 a.m. ET Thursday.
--The USDA will release its quarterly hogs and pigs report at 3 p.m. ET Thursday.
--The USDA will release its weekly export inspections report at 11 a.m. ET Monday.
