By Kirk Maltais


--Corn for March delivery fell 5.4% to $4.21 3/4 a bushel on the Chicago Board of Trade Monday, in reaction to today's WASDE report from the USDA showing higher ending stocks, production, and yields.

--Soybeans for March delivery fell 1.1% to $10.50 1/2 a bushel.

--Wheat for March delivery fell 1% to $5.12 1/4 a bushel.


HIGHLIGHTS


Out of Left Field: CBOT grain futures went into a tailspin after unexpected gains to ending stocks and yields reported by the USDA in its WASDE report, reversing the gains seen pre-report. "Not a single friendly number out there," said Charlie Sernatinger of Marex in a note after the WASDE's release. "We have been talking about how the risk for the market was that no one was looking for larger yield in the corn, and that's what we got." For corn, the USDA raised its outlook for crop yields to 186.5 bushels an acre, and increased its forecast for ending stocks by 200 million bushels to 2.23 billion bushels.

Shelter from the Storm: Precious metals got the biggest boost from heightened geopolitical tensions, but other commodities got some support as well, and are increasingly seen as safe places to park money, said Karl Setzer of Consus Ag Consulting. "Anything that can be turned into a physical asset," is getting investor attention, Setzer said. But support seen in precious metal did extend to grains, at least during morning trade.


INSIGHT


Growing Importance: The USDA is forecasting larger U.S. crops than expected by analysts in January's WASDE report, but the is question what kind of competition they'll face on the export market from crops coming from South America. Brazil and Argentina are expected to produce huge crops this year, meaning that world prices could turn lower. "It [is] hard to see much upside in the coming months unless South America really starts to see crop stress," said Doug Bergman of RCM Alternatives in a note.

Considering the Ramifications: The Justice Department probe of Federal Reserve Chair Jerome Powell regarding testimony about the central bank's building-renovation project, is raising new questions about the potential politicization of government reports. That includes USDA reports, such as the WASDE report, which can have a large effect on grain futures and could be a target for political manipulation, said AgResource in a note. "Questions surrounding whether USDA crop data can be politically tampered with are drawing new concern amid the DoJ investigation," said the firm. However, the firm adds that such tampering is unlikely to be seen in the agricultural sector, due to its smaller size compared to other markets.

Increased Inspections: Inspections of U.S. soybean shipments surged from the prior week, according to the USDA's latest Grain Export Inspections report. The USDA said that soybean export inspections for the week ended Jan. 8 totaled 1.53 million metric tons, up from 984,116 tons reported last week and higher than this time last year. Shipments to China were the key source of support for U.S. soybean inspections. For the week, inspections to China totaled 901,118 tons.


AHEAD


-The EIA will release its Weekly Petroleum Status Update report at 10:30 a.m. ET Wednesday.

-The USDA will release its weekly export sales report at 8:30 a.m. ET Thursday.

-The CFTC will release its weekly Commitment of Traders report at 3:30 p.m. ET Monday.


Write to Kirk Maltais at kirk.maltais@wsj.com

(END) Dow Jones Newswires

01-12-26 1528ET