TOP STORIES:

U.S. Crop Prices Are Rising, and China Is Buying -- Update

Dry weather, China's push to fatten its pigs and the lockdown-induced baking bonanza are lifting prices for U.S. row crops.

Futures prices for soybeans, corn and hard red winter wheat--the kind used for baking bread--have risen by about a third since a rally began Aug. 10. Soft red winter wheat, found in animal feed and processed foods, is up 22%.

The gains are a sharp reversal of fortune for farmers. The global coronavirus pandemic had cast doubt on demand, from the corn that finds its way into motor fuels to the wheat that winds up as restaurant dinner rolls.

Corn Futures Gain on Expectations of New Purchases By China

Corn for December delivery rose 1.4% to $4.16 1/4 a bushel on the Chicago Board of Trade on Monday amid anticipation of new Chinese purchases of U.S. corn as well as continued bullish sentiment surrounding dry weather in South America.

"Corn was up today on rumors of additional Chinese buying and a shut off of farmer selling," said Charlie Sernatinger of ED&F Man Capital. However, Mr. Sernatinger said, USDA data has yet to confirm the veracity of these claims, with Monday's grain export inspections report showing 817,476 metric tons of corn, well below the 2.24 million tons of soybeans inspected. "The most disconcerting thing about the corn demand is that the export numbers have still not ramped up," he said. "If they don't zip over a million tons next week, there will be some serious tongue-wagging going on."

Soybean Crush Hits Record -- Market Talk

12:45 ET - The daily crush rate for US soybeans hit 5.98 million bushels per day in October--a new record, according to the National Oilseed Processors Association. According to NOPA data, the previous record was 5.85 million bushels per day set back in March 2020. For the month, soybean crush totaled 185.2 million bushels, up from 161.5 million bushels in September and above 175.4 million bushels at the same time last year. Additionally, soybean oil stocks totaled 1.487 billion pounds, 39 million pounds above trade expectations, says Terry Reilly of Futures International. "Domestic use was better than expected," says Reilly. The report supports trader sentiment of a strong demand for US soybeans. CBOT soybean futures are up 0.4% Monday. (kirk.maltais@wsj.com; @kirkmaltais)

STORIES OF INTEREST:

December WASDE Looks to Gain Attention -- Market Talk

09:31 ET - In a normal year, December's release of the monthly WASDE report from the USDA doesn't attract as much attention from grains traders as other reports do. However, with the USDA's revisions to US production and carryouts in its November report, the December report is gaining in importance, says Karl Setzer of AgriVisor. "Typically the December release receives little attention as only demand is altered in that data," says Setzer. "This December update is likely to receive more attention though as US ending stocks were reduced more than expected in the November report." Overnight, corn futures rose 0.6%, soybeans rose 0.4%, and wheat fell 0.3%. (kirk.maltais@wsj.com; @kirkmaltais)

Ethanol Inventories Expected to Rise This Week -- Market Talk

1019 ET - Inventories of ethanol in the US look to climb again this week, amid a resurgent coronavirus that may impact the consumption of gasoline by motor vehicles. Ethanol inventories could jump by another 150,000 barrels, bringing the total to roughly 20.3 million barrels, says Terry Reilly of Futures International. If this is the case when the EIA releases its weekly data Wednesday, then it'll be the highest these inventories have been since late August. While another slowdown in ethanol is a bearish indicator for corn demand, traders have recently been focusing more on other demand factors, namely stronger than expected export demand. "The positive demand shock is still very much alive," says Marex Spectron. CBOT corn futures are up 0.7% Monday. (kirk.maltais@wsj.com; @kirkmaltais)

THE MARKETS:

Livestock Futures Finish Higher -- Market Talk

15:22 ET - Livestock futures trading on the CME finished higher--with the most-active live cattle futures contract closing 0.5% higher at $1.10425 per pound and the most-active lean hogs contract up 0.4% 65.15 cents per pound. Livestock traders are anticipating an uptick in demand on the consumer level for meat - although how that transpires remains unclear. "There is a lot of confusion out there as Covid has scrambled the food distribution system," says Steiner Consulting Group. "Foodservice demand remains hostage to COVID restrictions and weather and school lunch demand is even harder to figure out." According to the firm, feature activity for pork in particular has yet to rise, even though the Thanksgiving and Christmas holidays are right around the corner. (kirk.maltais@wsj.com; @kirkmaltais)

(END) Dow Jones Newswires

11-16-20 1728ET