By Kirk Maltais
-- Corn for July delivery fell 1.7% to $4.59 1/4 a bushel on the Chicago Board of Trade on Wednesday, falling as traders get their books in order ahead of the Friday USDA report.
-- Soybeans for July delivery fell 1.4% to $12.29 a bushel.
-- Wheat for July delivery fell 1.4% to $4.67 1/2 a bushel.
HIGHLIGHTS
Pressing Pause: Risk mitigation because of potential inclement weather appears to be on pause this week, with traders unsure of how the USDA will characterize the current status of U.S. crops in its next WASDE report Friday.
"We have a USDA report at the end of the week that is expected to show a comfortable supply outlook in the U.S. and globally," said Doug Bergman of RCM Alternatives. "Producers should make sure sales are caught up after recent gains, if the U.S. growing season is cooperative this summer, prices are expected to be lower this fall."
Short Stuff: Farmers and managed money funds sold CBOT futures Wednesday, but for different reasons.
Farmers are taking advantage of a recent uptick in prices to lessen their grain piles in storage ahead of the start of the new crop.
Fund traders, on the other hand, are gauging what their economic options are ahead of a WASDE expected to show ample grain supplies.
"The main driver now is that the large spec is still short, and still underwater," said Charlie Sernatinger of Marex in a note.
INSIGHT
Butterfly Effect: The size of U.S. corn and soybean crop estimates in Friday's WASDE report will be important to understanding fertilizer demand, Samuel Taylor of Rabobank says. "Any revision to the upside on corn will be a booster to nitrogen demand," he said.
Analysts surveyed by The Wall Street Journal are forecasting corn production to decline by over 400 million bushels from last year's production, and soybeans output is seen up by 265 million bushels from last year.
Other factors affecting fertilizer prices including geopolitical turmoil and natural-gas supplies.
Fertilizer prices reported by DTN have been declining from record highs hit in 2022 and either stayed flat or turned higher in recent weeks, in part because of issues at Baltimore's harbor following the bridge collapse.
Storage Pileup: Russia's wheat inventories through April totaled 27.5 million metric tons, exceeding the average for this time of the month by 65%, said SovEcon in a note.
"Russian stocks are near the record-high levels of the previous year due to good 2022-23 crop and sluggish wheat sales by farmers," said the firm.
Issues with export sales have been affecting Russian wheat all year, with prices going lower in an effort to spur additional demand. This has had an effect on prices for U.S. wheat attempting to compete with Russian product.
Emptying the Vault: Inventories of ethanol in the U.S. fell well below the low end of estimates from analysts surveyed by The Wall Street Journal this week.
In its latest weekly report, the EIA said ethanol stocks for the week ended May 3 fell to 24.2 million barrels. That is over 1.2 million barrels less than this time last week, and 800,000 barrels less than expected by analysts, who had called the range between 25 million barrels and 25.69 millions barrels.
The fall in inventories brings them to their lowest level seen since December, according to EIA data.
AHEAD
-- The USDA is scheduled to release its weekly export sales report at 8:30 a.m. EDT Thursday.
-- The USDA is due to release its monthly World Supply and Demand Estimates Report at noon EDT Friday.
-- The CFTC is scheduled to release its weekly Commitments of Traders Report at 3:30 p.m. EDT Friday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
05-08-24 1554ET
