By Kirk Maltais
--Corn for July delivery rose 1.6% to $6.90 3/4 a bushel on the Chicago Board of Trade Wednesday as U.S. daily ethanol production exceeded analyst expectations and hit levels unseen since before the Covid-19 pandemic.
--Wheat for July delivery fell 0.4% to $6.82 1/4 a bushel.
--Soybeans for July delivery fell 1.1% to $15.62 1/2 a bushel.
HIGHLIGHTS
Crushing Estimates: Corn futures on the CBOT got a lift from a stronger-than-expected ethanol production report from the EIA. U.S. ethanol production rose to 1.067 million barrels per day for the week ended June 4, up 33,000 barrels per day from last week's report. It's the highest daily production since February 2020, according to the EIA. "Ethanol production in the past four weeks have been great," said Rich Nelson of Allendale Inc. "We are running about 50 million bushels over USDA's hopes right now." Tomorrow's WASDE report from the USDA may confirm this uptick in ethanol demand, which could squeeze already-limited supplies for U.S. corn, said Mr. Nelson.
Wet Weather Welcome: AgResource says grain futures were in retreat "following the rain that fell across the driest area of the Central US-the Western and Central Dakotas overnight." The firm says several thunderstorm clusters began delivering rain in the afternoon Tuesday and persisted into the morning hours today. "This was the 2nd day where needed rain fell, and the moisture will be of benefit to Dakota crops," says AgResource. Traders have been closely monitoring weather in crop-growing areas, with the 2021/22 planting season recently concluded and sprouting crops vulnerable to adverse weather.
INSIGHTS
Port Pile-Up: A buildup of empty shipping containers at the three major ports in California is slowing the ability of U.S. grain exporters to meet the sizable uptick in global demand, says the American Farm Bureau Federation. According to data from the Los Angeles, Long Beach and Oakland ports, shipments are up 36% from this time last year. But congestion at the port has extended lead times for shipping out by as much as sixfold. "California ports support well above or near 50% of all U.S. exports for numerous agricultural commodities," said the AFBF - highlighting commodities like cotton and meat products as specifically hindered by the port backlogs.
Can't Beat Heat: The recent spate of rainfall seen in certain U.S. crop-growing areas is unlikely to last long, instead giving way to hot and dry conditions, said Arlan Suderman of StoneX. "There is a cool down coming mid-month, but the bulk of the below-normal readings are expected east of the core high-production counties of the Midwest, with the majority of the high-producing counties continuing to lean hot and dry," said Mr. Suderman. "There will be storm clusters that develop from time to time, but the overall bias continues, which does not favor trend yields."
May Heyday?: Export sales of U.S. grains are expected to stay relatively on-par with the previous week's figures, according to grains traders surveyed by The Wall Street Journal this week. Traders forecast wheat sales to land anywhere between 200,000 metric tons and 450,000 tons, corn sales between 400,000 tons and 1 million tons, and soybeans between 100,000 tons and 400,000 tons. For all three crops, these ranges would make the totals similar to those of last week's report. For corn, the total is expected to be well down from 6.25 million tons reported two weeks ago - as China has stayed largely absent from purchasing new corn exports since maintaining a big presence in May.
AHEAD:
--The USDA will release its weekly export sales report at 8:30 a.m. ET Thursday.
--The USDA will release its monthly world supply and demand report at noon ET Thursday.
--The CFTC will release its weekly commitment of traders report at 3:30 p.m. ET Friday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
06-09-21 1527ET
