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Wheat Up as U.S. Crop Condition Worsens

11/24/2020 | 03:39pm

By Kirk Maltais

--Wheat for March delivery rose 2.2% to $6.17 1/2 a bushel, on the Chicago Board of Trade Tuesday, in reaction to the USDA reporting a decline in the condition of U.S. winter wheat.

--Soybeans for January delivery were unchanged at $11.91 1/4 a bushel.

--Corn for March delivery fell 0.2% to $4.32 1/2 a bushel.

HIGHLIGHTS

Dry Run: The state of U.S. winter wheat being in good or excellent condition dropped 3 points in the past week to 43%, according to the USDA. The main problem for the U.S. wheat crop is Texas, where only 24% of its crop is in good/excellent condition. The decline in crop condition comes amid dry weather throughout the world, which is expected to lift prices going forward.

Dreams of Drumsticks: Grains traders sold today as the Thanksgiving holiday approaches, said Dan Hueber of the Hueber Report. "It is difficult to chalk it up to anything more than pre-holiday profit-taking, " said Mr. Hueber. "When you have markets that have been advancing for more than 14 weeks and sitting in very overbought technical positions, one should never assume that it could not be the beginning of something more significant."

INSIGHTS

Scorching Start: The pre-holiday correction in grains futures today isn't expected to extend long past the holiday, with South American weather still hot and dry with little signs of letting up. "By far, 2020 is one of the worst starts for a South America growing season in modern history," said AgResource. "Any CBOT break should be modest and of short duration."

High Times: Agricultural commodity markets are set to begin 2021 with high prices and a range of factors likely to hike them even further, according to Rabobank's annual outlook. "The fallout from the Covid-19 pandemic, which saw countries across the world stockpile goods, along with expected poor harvests due to dry weather conditions, are set to increase agri-commodity prices." It forecasts the strongest upside potential in soybeans, corn and wheat. However, Stefan Vogel, global strategist and head of agri-commodity markets at Rabobank notes that 2021 does bring its own risks, such as a continuation of Covid-19 pressures and La Nina.

 
AHEAD 
 

--The Chicago Board of Trade will be closed in observance of Thanksgiving on Thursday. It will close early on Friday, reopening at its regular schedule next week.

--Grains and livestock trading on the Chicago Board of Trade will close at 1:05 p.m. ET Friday.

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

--The USDA releases its monthly agricultural prices 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.

Lucy Craymer contributed to this article.

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

(END) Dow Jones Newswires

11-24-20 1538ET

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