Wheat Climbs on European Sources of Uncertainty — Daily Grain Highlights

By Kirk Maltais

--Wheat for December delivery rose 2.9%, to $5.95 a bushel on the Chicago Board of Trade on Friday, with traders mitigating risk from the difficulties Western Europe is facing with its wheat crop along with heightened hostilities in the Black Sea.

-Corn for December delivery rose 1.9%, to $4.13 3/4 a bushel.

-Soybeans for November delivery fell 0.4%, to $10.06 3/4 a bushel.

HIGHLIGHTS

Adding Up: Wheat futures led the CBOT throughout Friday on "a combo of factors including wetness in EU, more Black Sea tensions, dry weather for hard red winter wheat seedings in areas of Southern Plains and more technical buying," said Joel Karlin of Ocean State Research. The most immediate factor highlighted by some analysts is the threat of more Russian incursions and possible damage to grain-carrying vessels which could further constrict exports from there.

Dirt Off Your Shoulder: Grain traders pushed past Thursday's WASDE report from the USDA showing limited changes to the agency's previous estimates, instead looking for fresh indicators ahead. "While the report certainly wasn't bullish, it didn't bring enough of a bearish surprise to do too much damage, as the market bounces back this morning," said Matt Zeller of StoneX in a note.

Pressure Potential: Soybeans came under pressure as Friday progressed, with traders seeming to anticipate a new wave of pricing pressure as harvesting continues, especially with the USDA's fresh confirmation of a bumper U.S. soybean crop. "I would suspect soybeans move to fresh lows next week as harvest begins in earnest and corn should see similar action," said Brian Hoops of Midwest Market Solutions. With harvesting comes an expected influx of old crop soybeans hitting the market, as farmers empty their bins to make room for the new crop.

INSIGHT

Dwindling Crop: The EU wheat crop is projected to show its lowest volume in 12 years, said Strategie Grains in its latest forecast. The French firm says the EU crop is seen at 114.4 million metric tons, a 10% drop-off from the previous year. Driving the fall are poor crops in both France and Germany, with the French harvest at its weakest in roughly 40 years at 25 million tons. Excessive rainfall in Western Europe has hurt the wheat crop, but has become increasingly supportive for world wheat prices.

A Good Bet: The NOAA's Climate Prediction Center now gives a 71% chance for La Niña to emerge this winter, between September and November. The climate system is expected to persist through March 2025, although it may soon disappear after that. "A weaker La Niña implies that it would be less likely to result in conventional winter impacts," said the NOAA. A weaker system may lessen the bouts of extreme cold that hit crop-growing areas over the winter, although ample moisture would support crops planted next spring.

Emerging Issue: Dryness is creeping across the U.S. Corn Belt, hitting states that had mostly supportive growing conditions throughout the spring and summer. Drought conditions are also emerging in some states, such as Ohio, according to the latest data from the U.S. Drought Monitor released this week. The emergence of these dry areas arrives amid an underway harvest season. Conditions are becoming increasingly severe versus last week, the Drought Monitor said. Crop conditions reported weekly by the USDA will likely fall in reaction to the dryness, but row crops have largely completed their growing and are ready to be harvested by farmers over the next two months.

AHEAD

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

--The USDA will release its weekly Crop Progress report at 4 p.m. ET Monday.

--General Mills will report its fiscal 1Q 2025 earnings report before the stock market opens on Wednesday.

--The EIA will release its weekly ethanol production and stocks report at 10:30 a.m. ET Wednesday.

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

(END) Dow Jones Newswires

September 13, 2024 15:21 ET (19:21 GMT)

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