By Paulo Trevisani
--Corn for December delivery fell 3.3% to $5.43 a bushel on the Chicago Board of Trade on Friday, as weather forecasts turned bearish with the prospect of rain helping crop yield.
--Wheat for September delivery fell 1.2% to $6.84 a bushel
--Soybeans for November delivery fell 0.8% to $13.51 3/4 a bushel.
HIGHLIGHTS
Sog Story: Grain futures slid as expectations of rainfall tempered fears of tight supply caused by hot and dry conditions. "Weather outlook looks wetter for the late weekend into early next week for the Plains," Futures International said about corn. Meanwhile, the USDA reported flash export sales of 100,000 metric tons of soybeans for delivery to Mexico during the 2021/22 marketing year, but overall weak exports data continued to weigh down on prices.
Weighed Down Wheat: Weak exports and forecasts of wetter weather drove the most-active wheat contract down. Crops around the world remain under pressure from extreme weather conditions, but traders seemed to sense the opportunity for a correction. Continuous most active wheat futures were up around 3.8% over the past month and 7.6% year-to-date. Price support may still come back, though. "The bad weather is coming back as hot and dry conditions are in the forecast...for the next couple of weeks," Price Futures said. "World prices might have bottomed and should start to move higher, supporting wheat futures markets in the US."
INSIGHT
Corn's Condition: Corn fell amid signs of possible rainfall that could alleviate production losses from dry weather. But it could change fast, depending on how the forecasts evolve. "The fundamentals haven't changed much, the hot and dry midwest weather has continued to be front and center," RJO said. "Historically, we usually see corn pull back around this time of year but so far that hasn't been the case," the broker said, reminding that Monday's Crop Condition Report could set the tone "as the market looks for a fundamental catalyst."
Storage Ahead?: Weather forecasts and weak exports data hurt grain prices a day after the USDA reported disappointing foreign sales of U.S. corn and soybeans. There's debate about how long the heat will stay around the farmland and whether there will be bearish rain. AgriVisor reports that some grain producers are considering storing their old corn and soybeans crops along with the upcoming harvest.
Credit Matters: Credit availability has been a factor on wheat prices, Marex said, along with forecasts of tight supply and strong demand. "The structural link between credit and price held well in previous years. Unfortunately, we are registering a disconnect between credit creation and wheat prices so far in 2001," the broker said, adding that it may be making importing harder. "We qualify the divergence as 'negative', e.g., contracting credit and rising prices, based on the assumption that short-term credit facilitates importers' demand." Marex said the divergence is starting to close. "Broadly speaking, this is a price-positive development."
AHEAD
--The USDA will release its weekly export inspections report at 11 a.m. ET Monday.
--The USDA will release its weekly crop progress report at 4 p.m. ET Monday.
--The EIA will release its weekly ethanol production and stocks report at 10:30 a.m. ET Wednesday.
--The USDA will release its weekly export sales report at 8:30 a.m. ET Thursday.
Write to Paulo Trevisani at paulo.trevisani@wsj.com
(END) Dow Jones Newswires
07-23-21 1537ET
