Soybeans Rise Ahead of WASDE
By Kirk Maltais
--Soybeans for March delivery rose 1.4% to $13.74 3/4 a bushel on the Chicago Board of Trade Friday. Grains traders were optimistic that next week's WASDE will show a decline in U.S. ending inventories.
--Corn for March delivery rose 0.5% to $4.96 1/4 a bushel.
--Wheat for March delivery fell 0.5% to $6.38 3/4 a bushel.
HIGHLIGHTS
Prepping For WASDE: Grain futures mostly rose Friday after finishing lower yesterday. Thursday's move to the downside was seen as a brief correction. "USDA [is] likely tightening the U.S. balance sheet next week and hence the market is getting supported," said Marex Spectron.
Eye on the South: While the upcoming WASDE report was a key factor influencing grain futures, it wasn't the only one. The weather outlook in South America remained a consistent driver in the grain futures runup seen in recent weeks. "Argentina essentially has one shot at rain over the next seven days - Sunday - and forecast models have been scaling it back to a more scattered pattern. More significant rains are expected to continue over Brazil, although still generally below normal for this time of year." said Arlan Suderman of StoneX.
INSIGHTS
Welcome Back!: After a long absence, the USDA confirmed a new flash sale of U.S. soybean exports to China. In a notice Friday, the USDA said 204,000 metric tons of soybeans were sold to China for delivery in the 2020/21 marketing year. Demand for U.S. exports by China is a primary factor that has pushed soybean futures higher in recent weeks.
Rebuilding From Rubble: The successful dissemination of Covid-19 vaccines throughout the U.S. is a chief factor in gauging how much the U.S. ethanol industry will be able to recover from what was an 'abysmal' 2020, said Geoff Cooper, president and CEO of the Renewable Fuels Association. "We are being cautiously optimistic," said Mr. Cooper, who added that the biggest factor determining ethanol's ability to rebound is if gasoline consumption in the U.S. is able to return to pre-pandemic levels once a sizable portion of the U.S. is vaccinated. "The big question with the domestic gasoline market is can we get back to pre-pandemic levels and how soon," said Mr. Cooper. Such a resurgence would likely bolster ethanol prices, which in turn will allow facilities shuttered in 2020 to turn production back on.
AHEAD:
--The USDA will release its weekly export inspections report at 11 a.m. ET Monday.
--The USDA will release its monthly supply and demand report at noon ET Tuesday.
--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
01-08-21 1547ET
