By Kirk Maltais
--Wheat for May delivery rose 1.5% to $5.56 1/2 a bushel on the Chicago Board of Trade on Thursday after the WASDE's data showing less demand for U.S. grains didn't yield any outsized surprises.
--Soybeans for May delivery rose 1.1% to $8.63 1/2 a bushel.
--Corn for May delivery rose 0.5% to $3.31 3/4 a bushel.
No Surprises: Wheat futures led grains higher even though ending supplies rose more than expected, by 30 million bushels to 970 million bushels. "Looks a lot like 'sell the rumor, buy the fact' to me," said Craig Turner of Daniels Trading. More attention was paid to higher corn inventories as they indicated how deep ethanol production cuts could go, Turner said.
More Pressing Matters: Traders shifted attention to an early rally in oil prices and shrugged off the USDA's WASDE report. which projected inventory growth in grains. "The market doesn't care," said Charlie Sernatinger of ED&F Man Capital. "The OPEC story has more traction, as does the weakening of the U.S. dollar." Reports that Saudi Arabia and Russia have possibly come to an agreement to cut oil output are of importance to grains. WASDE data showed a 375 million bushel-cut to corn used for ethanol production because of lower oil prices over the past month.
Delayed Reaction: Corn futures saw a rise on the CBOT despite a higher-than-expected increase in ending inventories for corn. "The bulls stood on the sideline to pick up corn after the USDA report," said Terry Reilly of Futures International. The USDA forecast higher usage for corn in animal feed as well as products like alcohol for hand sanitizer. The USDA projects that corn consumed by ethanol production would drop by 375 million bushels to 5.05 billion bushels. EIA's report Wednesday showed production had fallen to a record-low 672,000 barrels per day while inventories rose to a record-high 27.09 million barrels.
Buying Cheap: Chinese interest in U.S. grain exports appears to be again linked to the price of the commodity. China purchased 504,000 metric tons of corn for delivery in the 2020/21 marketing year for the week ending April 2, a sizable chunk of the 2.1 million tons of new sales reported. This news comes as corn futures on the CBOT are trading close to $3.30 per bushel, well below the USDA's estimate of $3.60 per bushel as the average corn price in 2020.
Bean Counters: The USDA's forecast for South American soybean production shows a drop in crops, much like those produced by Brazilian state agency Conab. However, the USDA's figures are higher than Conab's figures, which place Brazilian soybean production at 122.1 million metric tons, down from 124.2 million tons in March. Meanwhile, the USDA is forecasting a soybean crop of 124.5 million tons, down from 126 million tons last month. For the U.S., less soybeans out of South America means that U.S. exports may become a more viable option for some buyers - even if their price is higher.
What Supply Chain Disruption?: Pasta-maker Barilla's Americas unit -- a major buyer of wheat grown in North Dakota and Canada -- doesn't anticipate a supply crunch for the grain it needs, said Jean-Pierre Comte, president of the company's American unit. "We don't see any risk of shortage in this area," he told The Wall Street Journal. Consumers have raced to buy dried pasta as they stocked up on food. Retail-level sales surged 115% for the four-week period that ended March 28 versus the comparable stretch a year ago, per Nielsen.
--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 Friday in observance of Good Friday. It will reopen for trading on Monday.
--The USDA releases its weekly grain export inspections data at 11 a.m. ET Monday.
--The USDA releases its yearly report detailing the historical record for crop production at 3 p.m. ET Monday
--The USDA releases its weekly crop progress report for the 2020/21 crop at 4 p.m. ET Monday.
Micah Maidenberg contributed to this article.
Write to Kirk Maltais at firstname.lastname@example.org