Wheat Futures Rise on Russian Crop Worries — Daily Grain Highlights

By Kirk Maltais

--Wheat for December delivery rose 2.1% to $5.90 1/4 a bushel on the Chicago Board of Trade on Wednesday, turning the corner on Tuesday's loss on stress to Russia's winter planting.

--Soybeans for November delivery rose 1.1% to $10.53 3/4 a bushel.

--Corn for December delivery rose 0.8% to $4.15 a bushel.

HIGHLIGHTS

Slowed Pace: Planting of crops in Russia this winter are behind the pace of this time last year, agricultural research firm SovEcon said Wednesday. The firm said that 8.3 million hectares of winter grains have been planted in Russia through late September -- which is down 1 million hectares from this time last year. "The pace of grain planting lags behind average figures due to unfavorable weather in the main winter grain growing regions," SovEcon said. Western Russia has only received roughly 20% of the precipitation it normally receives over the past month, the firm said. This squeeze provided CBOT wheat with support throughout Wednesday's trading session.

Chop it Up: Grain futures were choppy for much of the day, with traders balancing their books ahead of the end of the third quarter and getting ahead of the USDA quarterly stocks report that will be issued next week. The report is expected to show an increase in stocks for corn, soybeans, and wheat, ING Economics said in a note. "China has taken steps to protect [their] farmers by limiting the overseas purchases of grains as the domestic warehouses have plenty of grains that could lead to a rise in U.S. stocks," the firm said.

INSIGHT

Looking Good Here: The harvest in the U.S. balanced out any thoughts traders had about issues elsewhere Wednesday, and may be a source of pressure for grains for the rest of the week. "The harvest pace is picking up this week making it hard to sustain rallies," Tomm Pfitzenmaier of Summit Commodity Brokerage said in a note. In its Crop Progress report Monday, the USDA reported that the corn harvest is 14% complete, and soybeans are 13% harvested.

Off the Mark: Daily average production of ethanol in the U.S. fell to its lowest level in over four months, dropping below the 1 million barrels a day mark. The EIA reported Wednesday that average daily ethanol production for the week ended Sept. 20 was 994,000 barrels a day - a drop of 55,000 barrels a day from the previous week, and the lowest the average has been since May. Ethanol producers are expected to buy more corn as farmers increasingly sell their harvested grains, potentially boosting production figures in the coming weeks.

Not Feeling the Love: Commodity futures across the board caught a boost this week after the Chinese government announced a round of measures designed to kick-start its economy - but hopes that a rejuvenated Chinese economy will lead to resurgent commodity demand may be misplaced, Capital Economics said in a note. "As it stands, the stimulus package will not be a game-changer for China's commodity demand," the firm said, noting that the initiatives are focused more on looser monetary policy, which won't directly impact the appetite for commodities like grains.

AHEAD

--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 25, 2024 15:28 ET (19:28 GMT)

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