U.S. grains: Wheat declines as USDA estimates record global stocks

Corn gains on ethanol estimates; soybean traders eye Chinese demand

CBOT July 2020 wheat with 20-, 50- and 100-day moving averages. (Barchart)

Chicago | Reuters — Chicago wheat futures slid on Thursday after the U.S. Department of Agriculture estimated global stocks were at a record high in its monthly supply and demand report, traders said.

Soybean futures ended nearly unchanged as the USDA lowered export expectations, even after recent purchases from China supported prices. Corn advanced as USDA reported better-than-expected demand for corn-based ethanol.

The most-active wheat contract on the Chicago Board of Trade ended the day down seven cents at $4.99-1/4 a bushel (all figures US$).

CBOT soybeans settled the day up 1/2 cent at $8.66 a bushel and corn ended up 3-1/2 cents at $3.29-3/4 a bushel.

Higher global wheat supplies weighed on the market, while global usage declined only fractionally. The agency raised world ending stocks to a record high 316.1 million tonnes.

“Wheat didn’t have a great report,” said Craig Turner, senior ag broker with Daniels Trading. “That was a big bearish surprise.”

Leading Russian consultancies revised forecasts for this year’s Russian wheat harvest, tempering concern about the effects of a dry spring.

Corn traded higher as USDA reduced its 2019-20 corn-for-ethanol demand estimate by 50 million bushels from May, less than analyst predictions of 100 million or greater.

USDA left U.S. soybean planted acres unchanged from its March predictions, in contrast to some analyst predictions that farmers had switched corn acres for soybeans after ethanol production slumped due to the coronavirus lockdowns.

“Beans are being moved by production,” said Mark Gold, founder of Top Third Ag Marketing. “Most were looking for a big increase and they didn’t get it.”

USDA’s weekly U.S. grain export sales report showed soybean sales above trade estimates, with a combined 2.2 million tonnes purchased by China and unknown destinations, the largest reported single week of sales since February 2019.

Chinese state-owned Sinograin bought at least 120,000 tonnes of U.S. soybeans for shipment in December on Tuesday, traders said.

— Reporting for Reuters by Christopher Walljasper; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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