GRAIN HIGHLIGHTS: Top Stories of the Day

TOP STORIES:

 Biden Nomination for USDA Throws Vilsack Back Into Food-Policy Fight 

President-elect Joe Biden’s nomination this week of former U.S. Department of Agriculture Secretary Tom Vilsack to again head the agency taps a familiar Farm Belt policy maker to helm a department critical to helping farmers and hungry Americans survive the coronavirus pandemic. The USDA’s dual role — overseeing food aid for Americans and regulating food production — is at the heart of a renewed debate over the agency’s focus, as Covid-19’s economic toll has deepened food insecurity in the U.S. while compounding challenges for farmers.

 Wheat Futures Up Again as Market Mulls Russian News 

Wheat for March delivery rose 3% to $6.14 1/2 a bushel, on the Chicago Board of Trade on Friday as grain traders saw Russian comments about controlling inflation of food prices as bullish. Russian President this week told the government to develop a plan to curb sharp price increases for staples such as bread and sunflower oil, and Prime Minister said Thursday that food producers, exporters and retailers should stop taking advantage of consumers, according to media reports. Bloomberg cited an export lobby group as saying Russian officials are considering a wheat export tax in addition to an earlier proposal to set a grain shipment quota for a few months next year. “The Black Sea essentially sets the world price for wheat, and Russia is telling us that it is going higher,” said Arlan Suderman of StoneX. While Thursday’s WASDE showing a smaller ending stock carryout for world wheat was also supportive for futures, Mr. Suderman says it “just added a bit of fuel.”

STORIES OF INTEREST:

 Neutral Wasde Doesn't Deter Strong Long-Term Grains Outlook -- Market Talk 

14:07 ET – Yesterday’s Wasde didn’t show any movement in the USDA’s expectations for corn ending stocks or production, and a smaller-than-expected decline in the domestic soybean carryout. Even so, many grains traders aren’t convinced that their bullish expectations are unwarranted. “[Our] outlook for CBOT corn and soybeans is outright bullish as demand rationing rally has yet to occur,” AgResource says. For soybeans in particular, strong demand globally is expected to exceed available supply, especially if dryness in South America dramatically hurts soybean yields in Argentina and Brazil. Therefore, futures prices are expected to rise in order to account for this limited availability. Soybean futures have risen over 30% since August, topping off close to the $12 a bushel mark late last month. (kirk.maltais@wsj.com; @kirkmaltais)

 Ethanol Market Sheds Nearly $4B During Pandemic -- Market Talk 

10:11 ET – Since the coronavirus pandemic moved into the US in March, the US ethanol industry has lost over $3.8B in revenues, according to data released by the Renewable Fuels Association this week. With new lockdowns growing as new cases surge, representatives of the ethanol industry are calling for any new Covid-19 relief package passed by Congress to include help for ethanol. “Gasoline and ethanol consumption are still substantially below pre-pandemic levels, and it is likely that this will persist for a number of months,” says the RFA. The EIA reported this week that ethanol inventories rose to their highest levels since late May, up to 22.08M barrels this week. (kirk.maltais@wsj.com; @kirkmaltais)

THE MARKETS:

 Hogs Shed Nearly 5% in Two Days -- Market Talk 

15:37 ET – Hog futures trading on the CME have been hit with weakness over the past two days, with the most-active contract falling 4.6%. General malaise surrounding the Chinese appetite for US pork exports has been a factor sinking futures. “Despite the fact Chinese hog and pork prices have risen recently, we are not seeing any sign of a resurgence in sales,” says Rich Nelson of Allendale. Lean hog futures finished down 2.9% to 63.225 cents per pound Friday, which is the lowest they’ve traded in nearly a month. Meanwhile, live cattle futures finished trading up 1.3% to $1.1325 per pound. (kirk.maltais@wsj.com; @kirkmaltais)

(END) Dow Jones Newswires

12-11-20 1742ET

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