By Kirk Maltais
--Wheat for September delivery rose 1.3% to $5.28 1/2 a bushel on the Chicago Board of Trade Thursday, as U.S. wheat exports start to look more attractive on the world market thanks to rising ocean freight rates.
--Corn for December delivery fell 0.2% to $3.39 1/4 a bushel.
--Soybeans for November delivery fell 1% to $9.05 1/4 a bushel.
HIGHLIGHTS
Gonna Cost Ya: U.S. wheat futures have been on the rise, with freight rates starting to favor exporters buying wheat off of California ports, said Charlie Sernatinger of ED&F Man Capital. "Traders are starting to pay attention to ocean freight rates, which have been moving up smartly this month," says Mr. Sernatinger. "This is starting to become a bigger and bigger calculation on destination prices, and is starting to make U.S. wheat look somewhat more attractive off the west coast." China has been rumored as taking a bigger interest in U.S. wheat exports, and traders may see freight rates as a reason for increased Chinese buying.
Stronger Than Expected: Corn yields in Illinois are strong, even despite the powerful wind storm that blew through the state earlier this month, said Pro Farmer. On the third day of its week-long crop tour, Pro Farmer assessed the average corn yield in Illinois at 189.4 bushels per acre. The figure is below the USDA's estimate of 207 bushels per acre, but well above Iast year's yield of 181 bushels per acre. The yield figures pulled corn futures lower Thursday.
INSIGHTS
Waiting For More: Scouts on the Pro Farmer Midwest Crop Tour are traversed eastern Iowa this morning, the location of most of the damage from last week's derecho. Grain traders are waiting for confirmation of just how bad the wind damage is to corn and soybean crops, in order to estimate how big of a bite the storm took out of this year's bumper crop. "The rest of Iowa where some of the worst wind damage is expected to be found will be covered today as well as Minnesota before releasing their national yield estimate tomorrow after the close," said Doug Bergman of RCM Alternatives.
New Offering: The CME said Thursday that it is launching a new South American soybeans futures contract, which will become active Sept. 21. The contract is going to be based on the Brazilian soybean price assessment currently provided by Platts, and is designed to provide traders with exposure to the Brazilian soy market. "As Brazil has emerged as a leading producer and exporter of soybeans, regional pricing alternatives have become increasingly important for risk management," said Tim Andriesen, CME Group Managing Director of Agricultural Products. Currently, traders base much of their soybean business on the CBOT soybean price.
Bigger Cargoes: Rail shipments of U.S. grains are up, says the USDA. U.S. Class I railroads originated 22,081 grain carloads during the week ending Aug. 8, according to this week's grain transportation report from the USDA. This is a 4% increase from the previous week, 4% higher than last year, and 4% more than the three-year average. The uptick in grain shipments may signal higher demand for U.S. grains domestically. However, 29 ocean-going grain vessels were loaded in the U.S. Gulf, the USDA says, 34% less than the same period last year.
AHEAD:
--The USDA releases its monthly Cattle on Feed report at 3 p.m. ET Friday.
--The CFTC releases its weekly commitment of traders report at 3:30 p.m. ET Friday.
--The USDA releases its weekly grain export inspections data at 11 a.m. ET Monday.
--The USDA releases its monthly cold storage report 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.
