Wheat Futures Fall as Traders Sell Into Rally — Daily Grain Highlights

By Kirk Maltais

--Wheat for December delivery fell 0.6% to $5.78 1/2 a bushel on the Chicago Board of Trade on Tuesday, with support from a slate of economic measures announced in China giving way to profit-taking later in the session.

--Corn for December delivery fell 0.4% to $4.12 a bushel.

--Soybeans for November delivery rose 0.3% to $10.43 1/4 a bushel.

HIGHLIGHTS

Fading Spark: Initial strength in CBOT grain futures was tied to China's slate of economic measures meant to turn the corner on weakness there. But that strength didn't last long, as farmers took advantage of fund short-covering to sell into the rally. "Today was an actionable day for farmers to sell and protect," said Tommy Grisafi of Advance Trading, adding that further harvest pressure is expected next week.

Nearing the End: Also fueling the morning short-covering was end-of-quarter book balancing, said Naomi Blohm of Total Farm Marketing in a note. Blohm added that other factors outside of the grains market, including the first interest rate cut in 4 years by the Federal Reserve and uncertainty surrounding U.S. elections, also have traders exiting their shorts. "Shake off the overly bearish negative sentiment for now," Blohm advised clients in the note.

INSIGHT

Shrugging Off Progress: The U.S. harvest is proceeding faster than the usual five-year pace, and the corn and soybean crops are maintaining a steady good-or-excellent condition rating, according to the USDA's latest Crop Progress report. But grain traders appear to be discounting this update in favor of a continued dry forecast for Brazilian growing areas impacting their planting progress. "Soybeans and the soy complex drove volume overnight and are holding up the grains overall this morning, despite the U.S. harvest advancing and conditions remaining strong-early yield reports have not disappointed," Matt Zeller of StoneX said in a note.

Frost Bitten: New supply issues have hit Australia, with a frost hitting the Western and Central regions of the country. These issues surfacing in Australia could soon become supportive for futures prices, said AgResource in a note. "The chill occurred overnight, and it will take a few days to assess the yield impact," said the firm. "Additional cold weather events are forecast over the next few days across Central and Western Australia that will be closely followed."

AHEAD

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

--The USDA will release its weekly export sales report at 8:30 a.m. ET Thursday.

--The USDA will release its monthly Cold Storage report at 3 p.m. ET Thursday.

--The USDA will release its quarterly Hogs and Pigs report at 3 p.m. ET Thursday.

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

(END) Dow Jones Newswires

September 24, 2024 15:16 ET (19:16 GMT)

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