TOP STORIES:
Wheat Rises as Russian Grain Merchants Seen as Reluctant to Sell Crops
Wheat for December delivery rose 0.6% to $5.52 1/4 a bushel on the Chicago Board of Trade Monday, as Russian grain sellers appear to be holding off on putting their wheat on the international export market in hopes of pushing prices up.
Wheat futures lead CBOT grains futures higher Monday, despite indications that both the Russian and Canadian wheat crops are going to be bigger than previously expected. One reason may be the reluctance of Russian sellers to offload their crop at current prices. "Russian farmers have been slow sellers of new crop winter wheat, knowing that they have the cheapest wheat in the world," said AgResource. "Farmers are selling other commodities, in hopes that delaying wheat sales could result in better prices."
USDA Reports Large Corn Sale to China -- Market Talk
09:34 ET - Chinese buyers have procured 596,000 metric tons of US corn for delivery in the 2020/21 marketing year, the USDA says. This extends last week's streak of large corn and soybean export purchases by China, one driver of higher futures prices along with dry weather in some US crop-growing areas. While corn futures are at their highest levels since March, traders are still injecting caution into their outlooks. "The outlook for corn has changed with supply ideas dropping while feed and export demand is strong," says Doug Bergman of RCM Alternatives. "With that said, we can't get too far ahead of ourselves with harvest pressure likely coming soon and an ethanol industry that is still dealing with demand issues." (kirk.maltais@wsj.com; @kirkmaltais)
STORIES OF INTEREST:
Grains Futures Higher on Dryness Concerns -- Market Talk
09:08 ET - High heat and limited rainfall last week looks to extend into this week, driving CBOT grain futures higher overnight. "Overnight CBOT grain trade has started the week sharply higher as rain chances are limited for Iowa and Illinois where a flash drought has reduced yield potential during the past 3 weeks," says AgResource. Grains traders are looking towards the USDA's crop conditions report this afternoon, which will show to what extent dryness has hurt crops. (kirk.maltais@wsj.com; @kirkmaltais)
Ethanol Stockpiles Expected to Grow -- Market Talk
13:30 ET - Ethanol stockpiles are expected to grow this week, which would indicate that gasoline consumption is keeping at a slower pace amidst a lingering coronavirus pandemic in the US. The EIA said last week that ethanol stockpiles were at 20.41 million barrels - up 139,000 barrels from the previous week. Stockpiles are projected to grow another 75,000 to 175,000 barrels this week, says Futures International. However, production is also expected to grow, albeit at a much slower rate. Futures International forecasts ethanol production to increase by 5,000 barrels per day this week, up from 931,000 barrels per day last week. (kirk.maltais@wsj.com; @kirkmaltais)
THE MARKETS:
Cattle Futures Rise on Chinese Interest -- Market Talk
15:09 ET - Live cattle futures on the CME finish higher, closing up 0.4% at $1.053 per pound. "We are now seeing China increase its beef imports with last week's purchases totaling 3,315 metric tons, the most on record for one week," says Karl Setzer of AgriVisor. "The building trade tensions between China and Australia are thought to be behind the increase in US trade, as is the simple ongoing rise in Chinese meat demand on a whole." Meanwhile, lean hog futures closed trading Monday down 0.1% to 53.6 cents per pound. (kirk.maltais@wsj.com; @kirkmaltais)
