By Kirk Maltais
--Wheat for December delivery fell 2.1% to $7.18 3/4 a bushel on the Chicago Board of Trade Wednesday, after Egypt's grains buying authority canceled a tender for wheat exports.
--Corn for December delivery fell 2% to $5.12 1/4 a bushel.
--Soybeans for November delivery fell 0.3% to $11.95 1/4 a bushel.
HIGHLIGHTS
Change of Heart: Wheat futures led the CBOT lower Wednesday, with a canceled tender by the Egyptian grains-buying authority providing pressure to the futures contract. Egypt's General Authority for Supply Commodities received 11 offers in the tender, the cheapest of which was 60,000 metric tons of Ukrainian wheat costing $325.25 a ton, according to a lineup of offers seen by the Wall Street Journal. However, GASC made no purchases and instead canceled the tender citing high prices. "GASC playing a game of chicken yesterday that really did not work out for them," said Richard Buttenshaw of Marex Spectron.
Jumping Ship: Large funds are turning away from CBOT grains futures today, said AgResource. "Massive fund selling is pummeling corn, soybean, and wheat futures," said the firm. "The selling in the summer row crops is the leftover bearishness from Tuesday's USDA crop report." Yesterday's WASDE report showed higher yield estimates for U.S. corn and soybean crops.
Possibly Overdone: Soybean futures didn't fall as much as corn or wheat, with grains traders having sold off heartily yesterday. Yesterday's uptick in yield reported in the USDA's WASDE report was the largest upward October revision in 8 years, said Tomm Pfitzenmaier of Summit Commodity Brokerage. Even so, selling on that news appears to have been overdone, he said. "The market ahead of yesterday's report had already been assuming that the report would be negative and had sold off, so yesterday's selling may have been a little overdone, at least for the time being," said Mr. Pfitzenmaier.
INSIGHTS
Back on the Grind: The USDA confirmed a new flash sale of U.S. soybeans to China, with 330,000 metric tons of soybeans sold there for delivery in the 2021/22 marketing year. Additionally, the USDA has confirmed that 161,544 tons of corn have been sold to unknown destinations for delivery in 2021/22, and 198,000 tons of soybeans sold to unknown destinations during 2021/22. It's the first confirmation of sales to China in recent days, and may indicate the future direction of soybean prices. "The key to the next move in beans is trying to figure out what the Chinese are doing, and why they are doing it," said Charlie Sernatinger of ED&F Man Capital.
Nail Into the Coffin: The content of Tuesday's WASDE report appears to have dulled positive trader sentiment for grains, said Dan Hueber of the Hueber Report. "While the USDA adjustments in wheat and, to a lesser extent, corn were relatively insignificant yesterday, the October report would appear to have driven the last nail into the 2020/21 bull market coffin for the grain and soy trade," said Mr. Hueber. "Keep in mind, this market has gained 172% over the past 62-weeks and pushed into a record high."
AHEAD:
--The EIA will release its weekly ethanol production and stocks report at 10:30 a.m. ET Thursday.
--The USDA will release its weekly export sales report at 8:30 a.m. ET Friday.
--The CFTC will release its weekly commitment of traders report at 3:30 p.m. ET Friday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
10-13-21 1525ET
