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Soybeans Drop as Traders Shift Focus -- Daily Grain Highlights

10/21/2021 | 03:27pm

By Kirk Maltais

--Soybeans for November delivery fell 1.7% to $12.24 a bushel on the Chicago Board of Trade Thursday as funds reversed course when energy prices slid.

--Corn for December delivery fell 1.3% to $5.32 1/4 a bushel.

--Wheat for December delivery fell 1.1% to $7.41 1/4 a bushel.

HIGHLIGHTS

Turnaround: Large fund traders were actively piling into CBOT grain futures Wednesday, but not so much on Thursday. "The bottom line is that yesterday's strength was more about money flow coming into the commodities in an inflation play than it was the fundamentals of supply and demand, even though several of the commodities do have a story," said Arlan Suderman of StoneX.

Energy Curveball: Soybeans suffered the most in Thursday's session, pressured by weakness in soyoil futures due to crude oil prices falling. Natural gas prices also fell today, down 1.1% to $5.115/mmBtu after the EIA reported a bearish weekly rise in gas inventories. It said gas-in-storage rose last week by 92 billion cubic feet, above expectations of analysts surveyed by The Wall Street Journal. The uptick is seen as reflecting weak consumption rates as mild weather limits any heating demand.

INSIGHTS

Prolonged Lift: Higher global energy costs are expected to keep prices for agricultural commodities higher throughout most of 2022, according to the World Bank. However, the uptick seen in commodities will turn around as supply chain difficulties work themselves out, the bank said in its outlook on Thursday. "Recent volatility in prices may complicate policy choices as countries recover from last year's global recession," said Ayhan Kose with the World Bank.

On the Water: Barge movement picked up this month, the USDA reported in its latest grain transportation report. "Downbound barged grain movements and barge-unload operations in the New Orleans region appear to have gradually recovered from Hurricane Ida's impacts, including damaged hopper barges among other logistical challenges, as the grain harvest has progressed," said the USDA. The agency reports that for the week ending October 16, barged grain movements totaled 813,670 tons, up 38% from the previous week and 8% higher than the same period last year. Also, 42 oceangoing grain vessels were loaded in the Gulf for the week ended October 14, 27% more than last year.

Soy Surge: Export sales of U.S. soybeans surged this week, driven mostly by China. For the week ended October 14, sales totaled 2.88 million metric tons for the 2021/22 marketing year - driven largely by 1.88 million tons sold to China for the week. Other leading buyers for the week were unknown destinations, the Netherlands, Egypt and Bangladesh. Grain traders surveyed by The Wall Street Journal this week had forecast soybean sales to total between 1.2 million tons to 2.5 million tons. Last week, soybean sales totaled 1.15 million tons.

AHEAD:

--The USDA will release its monthly Cattle on Feed report at 3 p.m. ET Friday.

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

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

Dan Molinski contributed to this article.

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

(END) Dow Jones Newswires

10-21-21 1526ET

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