By Kirk Maltais
--Corn for December delivery fell 3.4% to $3.44 3/4 a bushel on the Chicago Board of Trade on Friday, in response to the USDA's marginal cuts to corn-production estimates.
--Soybeans for November delivery fell 1.2% to $8.90 3/4 a bushel.
--Wheat for September delivery rose 1.7% to $5.34 a bushel.
HIGHLIGHTS
Wimpy WASDE: Friday's report contained little to change grain traders' view of the current supply and demand situation, with corn-production forecasts falling to 15 billion bushels and soybean-production estimates rising to 4.16 billion bushels, pretty much as analysts expected. "Nothing too earth-shattering in the numbers today," said Doug Bergman of RCM Alternatives. "Weather over the next couple weeks will be a bigger price driver than today's numbers."
Summer Showers: Rainfall in the U.S. Corn Belt kept grain futures down before and after the WASDE report's release. "Very beneficial rains fell across eastern Iowa, southern Wisconsin and northern Illinois over the past 24 hours," said Arlan Suderman of StoneX. "The current storm system will continue to provide rain chances for central and eastern areas of the Midwest over the next several days." A slowdown in the weather system's progression means rain may linger in the area longer than previously expected, Mr. Suderman said.
Wheat Surprise: Grains traders reacted favorably to the USDA's projection of lower wheat production in 2020. The WASDE forecast of 1.82 billion bushels was below analyst estimates of 1.86 billion bushels. "The surprise of the day has to be the wheat production numbers, which were bullish," said Charlie Sernatinger of ED&F Man Capital.
INSIGHTS
Beijing Buying: Chinese buyers have purchased roughly 1.69 million metric tons of grains for delivery in the 2019/20 and 2020/21 marketing years. Of that, 1.37 million tons of corn were sold for delivery in both marketing years, 190,000 tons of hard red spring wheat were sold for 2020/21, and 130,000 tons of hard red winter wheat were sold for 2020/21. Even though the sale of corn to China dwarfs the recent weekly export sales of corn overall--with sales totaling one million tons in this week's report--grain traders focused more on WASDE and the weather.
Phase One Forever: President Trump cast doubt on the possibility of the next phase of trade agreements between the U.S. and China coming to pass, citing dissatisfaction with Beijing's response to the coronavirus outbreak in Wuhan. "They could have stopped the plague, they could have stopped it, they didn't stop it," Trump told reporters Friday. The U.S. and China signed the phase one deal in January, which was touted as a partial deal while the two sides worked on tougher issues.
AHEAD
--The USDA releases its weekly grain export inspections data at 11 a.m. ET Monday.
--The USDA releases its weekly crop progress report for the 2020/21 crop at 4 p.m. ET Monday.
--The EIA releases its weekly update on ethanol production and inventories at 10:30 a.m. ET Wednesday.
Write to Kirk Maltais at kirk.maltais@wsj.com
