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MarketScreener Homepage  >  Futures  >  Chicago Board Of Trade - Floor  >  WHEAT FUTURES (W) - CBR (FLOOR)/C1       

WHEAT FUTURES (W) - CBR (FLOOR)/C1

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Wheat Futures Drop on Hefty Canadian Crop Outlook

12/04/2020 | 03:59pm EST

By Kirk Maltais

--Wheat for March delivery fell 1.5% to $5.75 1/2 a bushel, on the Chicago Board of Trade on Friday in response to a new report that Canadian wheat production is expected to hit a seven-year high.

--Corn for March delivery fell 1.4% to $4.20 1/2 a bushel.

--Soybeans for January delivery fell 0.5% to $11.63 a bushel.

HIGHLIGHTS

O Canada: New data from Statcan projected Canadian wheat production at 35.2 million metric tons, the highest in seven years. Indications of ample supplies of the grain globally are placing pressure on wheat futures. "With U.S. wheat areas expected to catch moisture over the next week, the wheat market is breaking down and starting a lower trend," said Doug Bergman of RCM Alternatives.

Oil Well: Soy oil futures trading on the CBOT helped provide support for soybean futures. U.S. soy oil closed up 1.8% at $38.41 a pound, following Asian palm oil futures jumping to new contract highs on tightening supply. The Malaysian contract closed at roughly 3,437 Malaysian ringgit per metric ton and may have more upside left, according to grains traders.

INSIGHT

China Avoids U.S. Grains: New export sales of U.S. corn to Mexico were reported by the USDA on Friday, with 182,020 metric tons sold. News of the sale didn't galvanize futures buying on the CBOT, as grains traders had anticipated the USDA might confirm new purchases by China of corn and soybeans. "Traders are disappointed China is staying away from the US market as the USD trends lower," said Terry Reilly of Futures International.

More Upside: Even with corn futures down Friday, grains traders see potential gains ahead as U.S. corn remains competitive on the global export market, said RJO Futures. "China corn prices are trading near $10 per bushel and the spread between U.S. and China corn prices are historically wide," the firm said. "U.S. corn is priced well below Brazil, Argentina and Ukraine." A resumption of dryness in South America and Chinese purchasing of U.S. exports may drive corn higher in the short term, RJO Futures said.

Dry Eyes: Crop-growing regions of Argentina and southern Brazil are expected to remain dry in the next 30 days, even if more rainfall does hit these areas, said Arlan Suderman of StoneX. Rainfall is expected to be anywhere from 2 inches to 4 inches off of seasonal norms, which will continue to hurt crops grown there, particularly soybeans. "A short crop in Brazil increases demand for U.S. soybeans, while a short crop in Argentina increases demand for product over the coming year," Mr. Suderman said.

AHEAD

--The USDA releases its weekly grain export inspections data at 11 a.m. ET Monday.

--The USDA releases its weekly crop progress report for the 2020/21 crop at 4 p.m. ET Monday.

--The EIA releases its weekly update on ethanol production and inventories at 10:30 a.m. ET Wednesday.

Write to Kirk Maltais at kirk.maltais@wsj.com

(END) Dow Jones Newswires

12-04-20 1558ET

Stocks mentioned in the article
ChangeLast1st jan.
CBOT ETHANOL FUTURE (EH) - CBR (FLOOR)/C1 0.83% 1.09 End-of-day quote.-20.73%
CORN FUTURES (C) - CBR (FLOOR)/C1 4.06% 532.25 End-of-day quote.5.68%
EURO / ARGENTINE PESO (EUR/ARS) -0.23% 105.498 Delayed Quote.2.67%
EURO / BRAZILIAN REAL (EUR/BRL) 0.12% 6.5185 Delayed Quote.4.64%
LONDON BRENT OIL -0.50% 55.76 Delayed Quote.7.08%
SOYBEAN MEAL FUTURES (ZM) - CBE (ELECTRONIC)/C1 1.65% 436.7 End-of-day quote.-2.95%
SOYBEAN OIL FUTURES (ZL) - CBE (ELECTRONIC)/C1 2.26% 43.91 End-of-day quote.-0.90%
US DOLLAR / ARGENTINE PESO (USD/ARS) 0.21% 87.11 Delayed Quote.3.27%
WHEAT FUTURES (W) - CBR (FLOOR)/C1 2.58% 665.25 End-of-day quote.1.25%
WTI -0.53% 52.452 Delayed Quote.8.49%
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