Futures Prices Fall Amid Weak US Export Sales And Competition

Chicago Board of Trade Update

Wheat: For July delivery, wheat prices fell 1.9% to $6.45 1/2 per bushel on Wednesday, pressured by declining U.S. export sales due to insufficient consumer interest.

Corn: Prices for July delivery dropped 0.7% to $4.39 1/4 per bushel.

Soybeans: Prices for July delivery edged down 0.3% to $11.76 per bushel.

Market Highlights

Competitive Concerns: U.S. wheat faces significant challenges in the global market, with reports indicating Chinese traders are opting for domestic wheat over imports. “The U.S. remains $35 per metric ton above the world market, limiting all importer interest,” noted a market analyst. Anticipation for Thursday’s export report suggests weekly sales could range between 100,000 and 600,000 tons.

Favorable Conditions: The USDA’s recent crop progress report indicates that planting is proceeding as planned, with favorable weather conditions posing no immediate threats to grain health. “The dry forecast ahead has removed any remaining planting concerns,” stated Rich Nelson of Allendale, adding that there are currently no significant risk factors.

Industry Insight

Deteriorating Russian Crops: Agricultural research firm SovEcon has downgraded its forecast for the Russian wheat crop to 80.7 million metric tons, down from 82.1 million tons. This marks a reduction of nearly 14 million tons since the initial forecast for this year. Despite these issues, traders remain focused on the strong U.S. performance in spring wheat, as highlighted in Monday’s crop progress report.

Ethanol Production Trends: Data from the EIA indicates the start of the summer driving season post-Memorial Day, with U.S. daily ethanol production averaging 1.072 million bushels per day, the highest level in nearly two months. This is the fourth consecutive weekly increase in average production. Concurrently, ethanol stockpiles have decreased for the third consecutive week, now at 23.05 million barrels, the lowest since mid-December 2023. Despite recent declines, ethanol inventories remain relatively high, according to Tomm Pfitzenmaier of Summit Commodity Brokerage.