New-crop contracts of corn and winter wheat posted small gains Wednesday, while soybeans and spring wheat were nudged lower. Outside markets were supportive for commodities in general with December gold trading above $2,000 at its highest prices on record.
September KC wheat ended up 4 1/4 cents at $4.26 1/2 Wednesday, a small show of support after falling to a new contract low Tuesday. Just after KC wheat prices showed signs of finding support after late June, prices were hit with fresh bearish pressure again this week, coming from reports of high winter wheat yields in South Dakota, a higher private crop estimate for Russia, a favorable rain forecast for Australia and USDA’s 3-point jump in the good-to-excellent crop rating for spring wheat. The rain forecast for Australia still looks beneficial Wednesday and there are chances for rain on Russia’s spring wheat crop this weekend into early next week. USDA’s next WASDE report is due out next Wednesday, Aug. 12, and there is a chance the U.S. wheat production estimate will see a modest increase. There are also chances for surprises in foreign crop estimates as USDA and private estimates don’t always agree. For spring wheat, the forecast is mostly dry and favorable for harvest progress, but rain in eastern North Dakota may need to be watched. September Minneapolis wheat ended down 1/4 cent at a new contract low of $5.01 1/2. Fundamentally, wheat prices remain under bearish pressure as long as USDA and the International Grains Council continue to estimate large world wheat harvests for 2020-21. U.S. SRW wheat prices are the one bullish exception in the wheat sector, supported by a second year of limited supplies. From a technical view, all three U.S. wheat contracts are among the worst performers in the U.S. ag sector the past three months. The trends are down for cash HRW and HRS wheat prices, but up for cash SRW wheat. DTN’s National HRW Index closed at $4.01 Tuesday, near the 2020 low of $4.00. DTN’s National SRW Index closed at $4.87, down from a three-month high.
December corn ended up 3 cents at $3.23 1/4 Wednesday, a small recovery from Tuesday’s new contract low, while still facing strong bearish arguments for lower corn prices ahead. Wednesday’s weather map was mostly dry with only light amounts expected the next seven days. Hotter temperatures return to the western Plains this weekend and better rain chances for most of the Corn Belt are seen in the 6- to 10-day period, keeping corn crop conditions largely favorable. Pertaining to demand, the U.S. Energy Department said last week’s ethanol production totaled 931,000 barrels per day (bpd), down from 958,000 daily barrels the previous week and down 10% from a year ago. U.S. ethanol inventory remained at 20.3 million barrels, near its lowest level in over three years. While ethanol production has increased from its lows in late April, the bearish concern is that coronavirus is keeping the market depressed and it will take more time for economic activity to return. In other demand news, the U.S. Census Bureau said U.S. ethanol exports were higher in June, but down 4% in the first half of 2020 from a year ago, while distillers grains were down 7% over the same period. Fundamentally, corn prices remain under bearish pressure with a large fall harvest anticipated. Technically, the trend in cash corn remains sideways and is trading under pressure, near its April low. DTN’s National Corn Index settled at $2.87 Tuesday evening, a new two-month low and 21 cents below the September contract. In outside markets, September crude oil is trading near a four-month high and August gold is trading above $2,000 at new all-time highs. ADP said private sector jobs in the U.S. increased by 167,000 in July, less than expected, reported RTTNews.com. On a more hopeful note, Marketwatch.com reported Johnson & Johnson will receive $1 billion from the U.S. government to manufacture 100 million doses of COVID-19 vaccines.