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Grain Futures Fall, Wheat Breaks Winning Streak -- Daily Grain Highlights

07/22/2021 | 03:15pm

By Paulo Trevisani

--Wheat for September delivery fell 2.6% to $6.92 1/4 a bushel on the Chicago Board of Trade on Thursday, breaking a week-long winning streak as exports came in within expectations.

--Soybeans for November delivery fell 2% to $13.62 1/4 a bushel.

--Corn for December delivery fell 1.3% to $5.61 1/4 a bushel.


Falling Exports: Grain futures fell after a disappointing exports report. The USDA said that last week there were more cancellations than new orders of U.S. corn, while soybean net sales were well below expectations. Wheat came in within the range forecast by traders surveyed by WSJ, with net sales of 473K metric tons for the 2021-22 marketing year, up 11% from the previous week and 44% from the prior four-week average. Wheat prices had been rising amid fears of a tight global supply due to unfavorable weather and geopolitical issues, but they suffered a correction on Thursday.

Weak Demand: The USDA reported soybean oil net export sales of 700 metric tons for 2020-21 for the week ended July 15, down 16% from the prior four-week average. The meager figure fell within the wide range of expectations of traders surveyed by WSJ, who had forecast it to be anywhere between a reduction of 4K tons to sales of 10K tons. Weak demand overseas offset bullish weather forecasts that point to tight global supply of grains in the coming months.


Rally Ends: Wheat futures fell, after rising for six consecutive trading sessions on projections of a tight global supply due to unfavorable weather in several producing regions, including Russia. "Yield reports have generally been good in Winter Wheat areas but there have been mixed results reported in some Great Plains states," Price Futures says. Today's weak export sales report, however, may be a factor contributing to the correction, although the trend looks bullish for grain prices as dry conditions are expected to keep hammering production.

Weather Still Matters: Weather remains a driving factor for agricultural commodities, threatening world supplies as the global economy recovers from the pandemic, with prevalent drought conditions making any sign of moisture a bearish development for grain futures. "The forecast for rain in parts of the US growing region is putting [downward] pressure on Ag prices," Mizuho said. Meanwhile, export sales come in well below expectations for both corn and soybeans, with wheat meeting traders forecast from a WSJ survey.


--The CFTC will release its weekly commitment of traders report at 3:30 p.m. ET Friday.

--The USDA will release its weekly export inspections report at 11 a.m. ET Monday.

--The USDA will release its weekly crop progress report at 4 p.m. ET Monday.

Write to Paulo Trevisani at paulo.trevisani@wsj.com

(END) Dow Jones Newswires

07-22-21 1514ET

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