TOP STORIES:

Wheat Drops as Funds Prepare for WASDE

Wheat for July delivery fell 4.4% to $7.28 1/4 a bushel on the Chicago Board of Trade Monday, with large funds capturing some of their profits ahead of Wednesday's WASDE report.

Profit-taking in grains among fund traders appeared mostly focused on wheat, with the most-active contract leading the CBOT down Monday. Much of the selling appears to be related to Wednesday's WASDE report from the USDA. "The report is one of the most important of the spring, and the recent conservative nature of USDA regarding China has placed fund managers on the defensive," said AgResource.

Corn Is the Latest Commodity to Soar

America's biggest cash crop has rarely been more expensive. Corn prices have risen roughly 50% in 2021 and a bushel costs more than twice what it did a year ago.

Corn has been one of the sharpest risers in the broad rally in raw materials that is prompting companies to boost prices for goods and fueling concern among investors that inflation could hobble the post-pandemic economic recovery.

STORIES OF INTEREST:

China Moves More US Corn Purchasing to Next Year -- Market Talk

09:36 ET - The USDA has confirmed this morning that China has canceled more corn it had intended to buy in the 2020/21 marketing year, while buying more in the 2021/22 marketing year. According to the USDA, China has purchased 1.02M metric tons of corn for next year, this while canceling 280,000 tons that was scheduled for delivery in the current marketing year. The cancellation of exports for the current marketing year suggests that corn futures may have reached a level where demand rationing is kicking in. "Considering the recent gains, the shape that the crop went in in most areas, and the improved weather outlook, new crop corn looks to have downside risk," says Doug Bergman of RCM Alternatives. (kirk.maltais@wsj.com; @kirkmaltais)

ADM to Build New Soybean Crush Facility in North Dakota -- Market Talk

11:13 ET - Archer Daniels Midland announces plans to build a soybean crush facility in North Dakota to meet increased demand for soy products in the animal-feed and biofuel industries. According to ADM, the facility will be a $350M plant built in Spiritwood, N.D., and will process approximately 150,000 bushels of soybeans a day. The plant is scheduled to come online ahead of the 2023 harvest. The announcement comes as soybean oil futures on the CBOT have been on a steady climb this year--up over 50% year to date. The lift in soyoil in particular has been supportive for soybean futures, although they are down 0.2% this morning, while soyoil is down 0.8%. ADM gains 2.2% to $68.47. (kirk.maltais@wsj.com; @kirkmaltais)

THE MARKETS:

Cattle Higher as Producers Have Difficulty Ramping Up -- Market Talk

15:41 ET - Most-active live cattle futures trading on the CME finished up 2% to $1.185 per pound Monday. The pace of cattle slaughter is going slower than this time last year, suggesting some issues with producers being able to ramp up to take advantage of resurgent demand from food service providers. "Despite strong demand, packers continue to have a difficult time ramping up production," says Steiner Consulting. "Labor is a challenge for packers on a good day and these days the problem has become even worse as all industries are clamoring for people." Hog futures, meanwhile, closed trading Monday down 0.5% to $1.12475 per pound. (kirk.maltais@wsj.com; @kirkmaltais)

(END) Dow Jones Newswires

05-10-21 1719ET