By Kirk Maltais
-- Wheat for July delivery fell 1.5% to $4.88 3/4 a bushel on the Chicago Board of Trade Wednesday, hitting its lowest level in over eight months on pressure from robust overseas production and good weather globally.
-- Corn for July delivery rose 0.4% to $3.30 1/4 a bushel.
-- Soybeans for July delivery rose 0.5% to $8.71 1/4 a bushel.
HIGHLIGHTS
Bountiful Blues: Wheat prices continued to tumble, sinking further below the $5-per-bushel mark.
"U.S. wheat is trading near a 4-week low on U.S. harvest pressure and recent upward revisions to Black Sea production estimates," said Terry Reilly of Futures International. Profit-taking among traders amid a stronger U.S. dollar is a factor keeping wheat futures down, he added.
Sunburned: Grain futures on the CBOT were under pressure overnight before corn and soybeans turned higher this afternoon in response to weather forecasts showing conditions supportive for crop growth, meaning that for now, weather doesn't look to mitigate the large supplies of grains expected to hit the market this year.
"Grains are defensive today similar to most outside markets such as crude oil and gold," said Jerry Welch of Midwest Market Solutions. "The 6- to 10-day weather outlook for the Grain Belt shows excellent growing conditions and the complex is wallowing in modest red ink."
INSIGHT
Tapping the Brakes: The recovery of the U.S. ethanol industry following the coronavirus pandemic appears to have hit a wall, at least this week. According to data from the EIA, daily production totaled 841,000 barrels per day, an increase of only 4,000 barrels per day from last week. That is much lower than trader estimates of a 30,000- to 40,000-barrel uptick, which caused corn futures to trade lower following the report's release.
Robust Sales: Grains traders surveyed by The Wall Street Journal say they expect a big uptick in the amount of soybeans sold for the week ending June 11. Traders surveyed believe the USDA's weekly export sales report due Thursday could show anywhere from 1.1 million to 2 million metric tons of soybeans sold for the week.
If this does come to pass, it wouldn't be as much as last week's gargantuan figure of 2.2 million tons, but would still be a huge number driven mostly by increased Chinese buying of soybeans. The USDA reported a sale of 720,000 tons of beans to China on Thursday, which is underpinning the high figures estimated by traders.
Steady Progress: Thursday's export sales figures from the USDA may show increased Chinese buying of U.S. grain exports is proceeding as promised in the U.S.-China Phase One trade deal despite the issues with coronavirus faced by both nations, USDA Undersecretary Ted McKinney said. Speaking at a virtual event held this week, Mr. McKinney said despite negative coverage by U.S. media, Chinese buying is accelerating as intended.
"We have seen sales pick up," said Mr. McKinney, talking specifically about soybean exports. "We believe firmly that China will keep its word, like we'll keep our word on other things."
Since Thursday, the USDA has announced over 1.2 million metric tons of soybean sales to China.
AHEAD:
-- The USDA is scheduled to release its latest weekly export sales numbers at 8:30 a.m. EDT Thursday.
-- The USDA is due to release its monthly cattle-on-feed report at 3 p.m. EDT Friday.
-- The CFTC is scheduled to release its weekly commitments of traders report at 3:30 p.m. EDT Friday.
Write to Kirk Maltais at kirk.maltais@wsj.com
