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Soybean Futures Climb But Fail to Break $12/Bushel Barrier

11/20/2020 | 04:02pm

By Kirk Maltais

--Soybeans for January delivery rose 0.3% to $11.81 a bushel on the Chicago Board of Trade on Friday, paring gains after a move higher couldn't breach the $12 threshold.

--Corn for December delivery rose 0.2% to $4.28 1/4 a bushel.

--Wheat for December delivery rose 0.1% to $5.99 1/2 a bushel.


Swing and a Miss: Soybeans started the day higher but couldn't overcome the $12-a-bushel resistance level. The last time soybeans traded above $12 was 2016 and this was the second time this week that the January contract made a run at it, according to AgResource. That, plus no reported sales of U.S. corn or soybeans to China in nine days, caused a bout of profit-taking, AgResource said.

Fund Appetite: Grain futures as a whole turned higher after a brief correction Thursday. "Fund attitude remains the driving factor behind the market," said Karl Setzer of AgriVisor. "While there are fundamentals that continue to be monitored, including global weather and export demand, especially on soybeans, how we see funds react is what is driving futures."

Possible Confirmation: More flash sales of corn exports were announced Friday, with 158,270 metric tons of corn being sold to Mexico and another 131,000 tons being sold to unknown destinations. The designation "unknown destinations" is often attributed to China, and some traders may take it as a sign that Beijing is back in the market for U.S. corn. "Some traders are noting the increase in CBOT futures are related to money flow," said Terry Reilly of Futures International.


Volatile Situation: Most of the movement seen in grains futures recently is due to dry weather in key growing regions, such as South America and Russia. However, political uncertainty stemming from the U.S. election and what it may mean for U.S.-China relations could soon become a factor moving prices, said Fitch Solutions. Although Fitch currently sees grains trading signals as bullish, uncertainty over the future of President Trump's tariffs on Chinese goods remain.

Parched Plains: Even with some hurricane-related rainfall earlier this fall, the U.S. Plains -- where U.S. winter wheat is generally grown -- have been dry. "Overall, 28% of the belt received less than 50% of normal precipitation over the past 30 days with 10% receiving less than 25%, with the bulk of those deficits in Texas, Colorado and in the northern two-thirds of Kansas," said Arlan Suderman of StoneX. According to recent USDA data, only 46% of the U.S. winter wheat crop is in good or excellent condition, down from 52% at this time last year.


--The USDA releases its weekly grain export inspections data at 11 a.m. ET Monday.

--The USDA will release its monthly cold storage report at 3 p.m. ET Monday.

--The USDA releases its weekly crop progress report for the 2020/21 crop at 4 p.m. ET Monday.

Write to Kirk Maltais at kirk.maltais@wsj.com

(END) Dow Jones Newswires

11-20-20 1601ET

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