By Kirk Maltais
--Soybeans for July delivery fell 1.2% to $14.48 1/2 a bushel, on the Chicago Board of Trade Wednesday, weighed down by the steep decline in soyoil futures.
--Wheat for July delivery rose 0.2% to 6.62 3/4 a bushel.
--Corn for July delivery rose 0.8% to $6.73 a bushel.
HIGHLIGHTS
Bottom Falls Out: Both soybean oil and soybean futures fell Wednesday, with soyoil finishing down 5.3%. It is the sixth straight day that those futures have declined--with the most-active contract shedding over 14% in that timeframe. This comes after these futures had risen to all-time highs of over 72 cents a pound, based on enthusiasm surrounding the renewable fuels market. However, speculation that the Biden Administration may extend aid to oil refineries seeking to avoid clean-fuel mandates has put pressure on soyoil--which has pressured soybeans.
Weather Market: Grain futures trading on the CBOT were mixed Wednesday, with weather being at the forefront of trader's minds. Although rainfall has been seen in many crop-growing areas in the first half of this week, that precipitation is expected to soon stop--and in many areas, crops need more moisture. "Temperatures going below normal will help with the stress, but crops are in dire need of moisture through most of the region," said DTN, referring to the Northern Plains, where a lot of dryness is being seen. The Northern Plains produces corn, soybeans, and wheat.
Back on the Grind: After bowing out of a tender Tuesday, Egypt's grain-buying authority has relisted its tender for 55,000 metric tons to 60,000 tons of soft or milling wheat, for delivery in late August. As Tuesday's cancellation of its tender sent a signal that wheat prices are too high, Wednesday's relisting of its tender suggests that high prices are not as large of an issue as previously thought. "U.S. wheat is higher as Egypt retenders," said Terry Reilly of Futures International.
INSIGHTS
Lingering Volatility: Disagreement in weather models regarding the amount of rainfall coming to U.S. growing areas is expected to keep prices volatile for the foreseeable future, said Craig Turner of Daniels Trading. "The Euro model has been trending hotter and drier and the U.S. (GFS) has been cooler and wetter," said Mr. Turner. "The GFS has done a better job recently predicting the weather and that is what traders are going with for the moment." Tight inventories of old crop corn and soybeans is amplifying the importance of the weather, Mr. Turner adds.
Pulling Back: U.S. production of ethanol took a dive in the past week, according to data from the EIA--running counter to analyst forecasts and expectations that U.S. consumers will consume a growing amount of gas. In its weekly report, the EIA said that U.S. ethanol production fell 42,000 barrels per day to 1.025 million barrels per day for the week ended June 11. Analysts surveyed by Dow Jones this week had forecast production to rise for the fourth straight week. Meanwhile, ending inventories of U.S. ethanol jumped this week, more than expected by analysts. Stocks rose 642,000 barrels to 20.6 million barrels. Analysts surveyed had forecast stocks to rise to a maximum of 20.56 million barrels.
More Normal Pace: After a sharp increase last week, export sales of U.S. wheat are expected to return to a more normal level, according to grains traders surveyed by The Wall Street Journal. After recording sales of over 1.1 million metric tons last week, traders forecast wheat sales to total anywhere from 200,000 tons to 475,000 tons. The sharp uptick in wheat sales last week were due to sales carried over from the 2020/21 marketing year to 2021/22.
AHEAD:
--The USDA will release its weekly export sales report at 8:30 a.m. ET Thursday.
--The CFTC will release its weekly commitment of traders report at 3:30 p.m. ET Friday.
--The USDA will release its weekly export inspections report at 11 a.m. ET Monday.
--The USDA will release its weekly crop progress report at 4 p.m. ET Monday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
06-16-21 1505ET
