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GRAIN HIGHLIGHTS: Top Stories of the Day

07/02/2020 | 05:28pm

TOP STORIES:

 

Corn Slumps as Abundant Supply Stays in Focus

Corn for December delivery fell 2.1%, to $3.53 a bushel, on the Chicago Board of Trade Thursday, with grain traders' attention shifting back to expectations of an abundant 2020/21 corn supply even if planted acreage is down. Wheat for September delivery fell 1.4%, to $4.92 a bushel. Soybeans for November delivery fell 0.2%, to $8.97 1/4 a bushel.

Corn futures Thursday ended a three-day 10% rally after the USDA's Tuesday acreage report showed that planted corn acreage were 5 million acres lower than previously estimated. The reason is that while the report was a bullish surprise, supplies of corn are likely to remain onerous. "Corn has had a 3-day moon shot with the USDA acre drop driving the gains," said Doug Bergman of RCM Alternatives. "With that said, we've still got a pretty good crop growing in most areas, which will likely keep supplies elevated moving forward."

 

One-Third of Coronavirus Ag Payments Out -- Market Talk

12:40 ET - The USDA says roughly $4.9B in payments have been paid out through the $16B allocated to the Coronavirus Food Assistance Program. Of that $4.9B, $2.4B has been paid to livestock producers, $1.3B has been paid to nonspecialty crop producers, $1B has been paid to dairy producers and $113M has been paid to specialty crop producers, the American Farm Bureau says. Grain futures have rebounded as states attempt to reopen following the worst of the coronavirus pandemic, but reports of cases have ticked higher in recent days. (kirk.maltais@wsj.com; @kirkmaltais)

 

UN FAO: Food Prices Rise for First Time This Year

Global food prices rose in June for the first time this year, the United Nations' Food and Agriculture Organization said Thursday, suggesting that the sharp declines experienced by food commodities as the coronavirus has hit demand could be easing.

The UN FAO's monthly food price index, which tracks a basket of the most common foodstuffs such as grains, vegetable oils and meat, rose 2.4% in June to 93.2.

 

STORIES OF INTEREST:

 

China Buys More New Crop Soybeans -- Market Talk

09:05 ET - China continues to be a big buyer of US new crop soybean exports -- soybeans being grown in the 2020/21 marketing year. Of the 841,700 metric tons of new crop sold for the week ending June 25, 594,000 tons were sold to China, according to the USDA's weekly export sales report. Meanwhile, China bought no old crop soybeans. However, it's unlikely that today's report will have a strong impact to futures trading on the CBOT. "USDA export sales were seen neutral for the soybean complex," says Terry Reilly of Futures International. (kirk.maltais@wsj.com; @kirkmaltais)

 

AB Foods Has Cushion Against Uncertainty -- Market Talk

1028 GMT - Associated British Foods is well-placed despite economic jitters and lower sales at fashion retailer Primark, Hargreaves Lansdown says. Primark's third-quarter sales fell dramatically, but trading in the first few weeks of June looks promising, HL says. Meanwhile the group's food business has improved margins and benefited from consumers eating more at home. "While we see the recent performance as strongly positive, there's still a long way to go," HL's Nicholas Hyett says. "We still worry about the state of the global economy and what that could mean for all retailers in the medium term. Given those concerns, ABF's substantial cash pile is very welcome." Shares rise 5.4%. (philip.waller@wsj.com)

 

THE MARKETS:

 

Live-Cattle Futures Close Higher Ahead of Holiday Weekend -- Market Talk

13:57 ET - Live-cattle futures on the CME rise 2.2% at 99.4 cents a pound. The recovery of the cattle industry after the Covid-19 pandemic has come a long way since April, but still has a way to go, according to Steiner Consulting. "Slaughter at major processing plants has normalized, helping resolve some of the supply chain bottlenecks that developed in late April and May," the firm says. "However, beef features for the most current week were still about 40% lower than the same time last year." Lean-hog futures, meanwhile, fall 0.1% to 49.05c. The CME will be closed tomorrow in observance of Independence Day and will reopen Monday. (kirk.maltais@wsj.com; @kirkmaltais)

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