By Kirk Maltais
--Wheat for December delivery fell 3.5% to $5.54 3/4 a bushel on the Chicago Board of Trade Monday, in response to fears in overall markets regarding a possible resurgence of coronavirus in the U.S.
--Corn for December delivery fell 2.3% to $3.69 3/4 a bushel.
--Soybeans for November delivery fell 2% to $10.22 1/2 a bushel.
HIGHLIGHTS
Flare-Up Fears: Grains futures traded lower, driven largely by weakness in the larger macro markets. "Traders fear new Covid restrictions out of Europe as we head into the winter months and flu season," said Craig Turner of Daniels Trading. For grains, Monday's risk-off mentality may give traders an opportunity to take a breath before buying or selling more grains. "Traders are questioning if this is a top formation or if we are in consolidation," said Turner. "I think we are consolidating, and the range could be big for soybeans, because both corn and soybeans need to increase acres for 2021."
Fields of Dreams: Good weather for farmers to get out into their fields to either begin or do more harvesting is putting pressure on grains futures Monday, particularly in wheat. "A pronounced ridge/trough upper-air pattern...should accelerate the U.S. harvest," says AgResource. "The jet stream holds farther to the north, which maintains a summerlike weather pattern with favorable harvest conditions. The 11-15 day period keeps the warm/dry weather profile in place with the soybean harvest to gain speed into the weekend."
INSIGHTS
Sales Streak: The streak of flash export sales to China confirmed by the USDA is now up to 10 consecutive days, with the USDA confirming a sale of 132,000 metric tons of soybeans to China Monday, along with a sale of 132,000 tons of soybeans to Pakistan and 171,000 tons of soybeans to unknown destinations. This export sales activity has been the main reason that soybeans have jumped to over two-year highs. However, even with confirmations of export sales continuing, the strength in soybean prices may be running out. "Beans technically are in an uptrend, but are extremely overbought," said Doug Bergman of RCM Alternatives.
Inspections Slip: Export inspections this week announced by the USDA are slightly down from the previous week--with corn totaling 755,111 metric tons, wheat totaling 469,939 tons, and soybeans totaling 1.3 million tons. In all three cases, these categories are lower from the previous week. China still remains the main soybeans buyer--with 889,788 tons. China is also the main destination for corn, and Japan is the main destination for wheat.
AHEAD:
--The USDA releases its monthly cold storage report at 3 p.m. ET Tuesday.
--The EIA releases its weekly update on ethanol production and inventories at 10:30 a.m. ET Wednesday.
--The USDA will release its latest weekly export sales numbers at 8:30 a.m. ET Thursday.
--The USDA releases its quarterly hogs and pigs report at 3 p.m. ET Thursday.
