TOP STORIES: 



  Wheat Declines on Surplus Worries 


  Wheat for September delivery fell 2.6% to $4.75 3/4 a bushel on the Chicago Board of Trade Friday, in anticipation of a bearish surprise out of the USDA's stockpiles report scheduled to be released Tuesday. 


  The possibility that USDA data scheduled for release Tuesday showing growing grain stockpiles weighed on crop futures Friday - particularly wheat. For wheat, the contraction is coming from managed money funds. "As a general rule, funds have been very short on grains," said Dave Marshall of First Choice Commodities. "There's just this perception that we're going to be swimming in crop surpluses as far as the eye can see." Analysts surveyed by The Wall Street Journal mostly projected declines in grain stockpiles, but the resurgence of Covid-19 this week is shaking confidence in that outlook. 


  US-China Tensions Ratchet Up and Pressure Grains -- Market Talk 


  13:58 ET - Tensions between the US and China continue to rise, with Chinese leaders threatening to cut off its increased farm good purchases if the US continues to pressure China with sanctions for things like the mass detention of Uighur Muslims in China's northwestern Xinjiang region. The uptick in tension isn't sitting well with grains traders. "The Phase 1 Trade deal is ongoing but could become strained without a change in US political rhetoric towards China," AgResource says. Grain futures fall, led by wheat, which is down 3.3%. (kirk.maltais@wsj.com; @kirkmaltais) 


  STORIES OF INTEREST: 


  US Grains Exporters Rail Against Chinese Importing Rules -- Market Talk 


  12:52 ET - Exporters of US grains are railing against new requirements by the Chinese government for a "letter of undertaking," on shipments of food destined for China, an effort purportedly to ensure that these shipments don't carry the Covid-19 virus. "The recent move by Chinese authorities to require a statement of undertaking for food importers is not based on any legitimate food safety concern," says Dave Puglia, president and CEO of Western Growers, a US exporter of food. "At a time when American farmers are still trying to dig themselves out of a coronavirus-induced financial hole, it will be difficult for the industry to absorb further losses due to unfounded demands like this." CBOT grains futures are down Friday, led by  wheat--which is down 3.2%. (kirk.maltais@wsj.com; @kirkmaltais) 


  Managed Money Funds Raise Short Corn Position -- Market Talk 


  09:05 ET - The already-sizable short position held by managed money firms in corn futures continues to grow as rainfall beneficial to a nascent 2020 corn crop hits the US Corn Belt. Funds were net sellers yesterday of 25,000 corn contracts yesterday, according to AgriTel. The funds already hold a net short of 277,603 contracts, according to the CFTC's last commitment of traders report. December corn futures trading pre-market on the CBOT are unchanged Friday. (kirk.maltais@wsj.com; @kirkmaltais) 


  THE MARKETS: 


  Lean Hogs Finish 6% Lower -- Market Talk 


  15:15 ET - Lean hog futures on the CME finished trading Friday down 6.2%, closing down at 48.125 cents per pound. It's the lowest lean hog futures have traded at since late April, with the contract driven lower by concerns that Covid-19 will delay the return of food service businesses to consuming their normal levels of meat. "There is still considerable uncertainty in the US economy," says Steiner Consulting Group. Live cattle futures fell slightly Friday, dropping 0.1% to 96.025 cents per pound. (kirk.maltais@wsj.com; @kirkmaltais)