Wheat Futures Rise as Ukrainian Shipments Slow — Daily Grain Highlights

By Kirk Maltais

--Wheat for July delivery rose 2.6%, to $6.22 1/4 a bushel, on the Chicago Board of Trade on Tuesday, with wheat and corn getting a boost as Ukrainian shipments appear to be slowing even with a deal extension reached.

--Corn for July delivery rose 1.1% to $5.77 1/2 a bushel.

--Soybeans for July delivery fell 1.4% to $13.22 1/2 a bushel.

HIGHLIGHTS

Shipment Slowdown: Flows of grains out of Ukraine are shrinking, even after another extension of the Black Sea export corridor deal. The latest data from Ukraine shows that exports via the initiative stood at 118,300 metric tons through the week ended May 21 - which is down 78% from the previous week. "While the deal has been extended for two months, no inbound vessels were cleared in that week which led to a significant drop in volumes," said ING Economics in a note. The firm adds that a revival in those exports may come in weeks ahead.

Losing Steam: For soybeans, lots of selling in soy products combined with the sentiment that dry weather will have more of an adverse effect on corn than soybeans is weighing on futures, said Karl Setzer of Mid-Co Commodities. "Funds are also not short that complex so selling is developing," he said. The drop comes after finishing the trading session higher yesterday.

INSIGHT

Setting the Tone: Short-covering by fund investors is a major factor lifting corn and wheat futures in recent days, said Brian Splitt of AgMarket.net. How much of that happens before Memorial Day weekend may set the tone for trading in June, Splitt said. "3-day weekends are notorious for either reversing trends or accelerating trends, so I expect trade coming out of the weekend to be extremely important as we digest the changes made to weather models during the holiday," he said.

Pushing Forward: Planting progress for U.S. crops this spring is steadily moving ahead, with the planting for corn over three-quarters of the way there - and soybeans not far behind. In its latest Crop Progress report, the USDA said that U.S. corn planting is 81% complete, which is up from 69% last week and the four-year average of 75%. Soybeans are 66% done, versus 47% done last week and a four-year average of 52%. The focus is soon turning towards what the conditions of these crops are looking like as the summer starts, said John Payne of Hedgepoint Global in a note.

Summer Season: U.S. ethanol inventories are expected to decline for a third consecutive week, according to analysts surveyed by Dow Jones. Analysts forecast inventories to slide, potentially dipping below the 23 million barrel mark for the first time since last November. Meanwhile, daily production is expected to grow closer to the 1 million barrels per day mark, which continues a streak of positive moves for production as summer driving season draws near.

AHEAD

--The EIA will release its weekly ethanol production and stocks report at 10:30 a.m. ET Wednesday.

--The USDA will release its monthly cold storage report at 3 p.m. ET Wednesday.

--The USDA will release its bi-annual farm labor report at 3 p.m. ET Wednesday.

Write to Kirk Maltais at kirk.maltais@wsj.com

(END) Dow Jones Newswires

May 23, 2023 15:48 ET (19:48 GMT)

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