By Kirk Maltais
-- Wheat for March delivery fell 1.1% to $5.52 a bushel on the Chicago Board of Trade on Friday in reaction to reports from other agricultural agencies reporting stronger crops world-wide, including Australia, a competitor on the wheat export market.
-- Soybeans for January delivery fell 0.7% to $9.88 3/4 a bushel.
-- Corn for March delivery fell 0.2% to $4.42 1/2 a bushel.
HIGHLIGHTS
The View Abroad: Estimates from agricultural agencies across the world showed improvements to crop production in major growing areas, pressuring the price outlook for already-strong U.S. crops.
China's agency pegged total grain production for 2024 at 706.5 million metric tons. That is up 1.6% from 2023, and a record.
In Australia, the government raised its wheat production estimate to 31.9 million metric tons despite weather issues that earlier plagued its crops.
On Thursday, Brazil's Conab said crop production would be up 8.2% from the previous year.
Opposing Outlooks: The dollar weakened against the euro, even as it strengthens compared to other major currencies.
Analyst Rania Gule, from XS.com, wrote it has to do with opposing outlooks for the Federal Reserve and the European Central Bank. While the U.S. central bank faces lasting inflation pressures, its European counterpart seems to have more room to be dovish.
For grain traders, how the U.S. dollar fares against other competing currencies directly affects the desirability of their grain exports. Thursday's grain export sales report showed weakness in sales versus recent weeks.
INSIGHT
Looking for Hints: President-elect Trump's invitation to Chinese President Xi Jinping to attend his inauguration next month is being scrutinized by grain traders and analysts who are looking for indications on how trade tensions between the U.S. and China could be handled.
"Xi is in a weaker position of negotiation this time around, considering China's weak economy," said Arlan Suderman of StoneX in a note.
"But Xi also has something else that he didn't have in 2016, a pre-established relationship with Trump," Suderman added. This may allow for smoother negotiations to avoid a full-fledged trade war between the two, he concludes.
Bringing Up the Rear: Most categories of commodities are up year to date, led by softs such as cocoa and coffee, which helped push the soft commodities complex up 36% in 2024.
Grains, on the other hand, have shed 17% year to date, said Ole Hansen of Saxo Bank in a note, referencing data from the Bloomberg Commodity Total Return Index that tracks a basket of 24 different commodities.
New Sale to End the Week: The USDA announced a new flash sale of U.S. soybean exports Friday morning, building on what was reported Thursday by the agency.
The government says 200,000 metric tons of soybeans were sold to unknown destinations, for delivery in the 2024-25 marketing year.
This comes after the USDA reported a sale of 334,000 tons of soybeans Thursday, also to unknown destinations.
The "unknown destinations" moniker is often considered by grain traders to be another designation for China, although this isn't necessarily the case.
AHEAD
-- The CFTC is scheduled to release its weekly Commitments of Traders Report at 3:30 p.m. EST Friday.
-- The USDA is due to release its weekly grains export inspections report at 11 a.m. EST Monday.
-- The EIA is scheduled to release its weekly ethanol production and stocks report at 10:30 a.m. EST Wednesday.
-- Paulo Trevisani contributed to this article.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
12-13-24 1521ET
