By Kirk Maltais
--Wheat for December delivery rose 1.4%, to $5.79 3/4 a bushel, on the Chicago Board of Trade on Friday, with China's purchasing of U.S. wheat exports a positive surprise for grain traders.
--Corn for December delivery fell 0.4%, to $4.94 a bushel.
--Soybeans for November delivery fell 0.6%, to $12.82 a bushel.
HIGHLIGHTS
Demonstrating Need: This week's export sales report from the USDA showed China as the lead buyer of U.S. wheat exports--a development of note, said Naomi Blohm of Total Farm Marketing. "It is significant that China bought wheat," said Blohm in a note. "This suggests that their wheat, and likely corn crops, did suffer this summer as we speculated. This also says they want to secure food in case the wars continue to escalate." The USDA also reported a flash sale of 181,000 metric tons of soft red wheat to China on Friday morning.
Fair Play: Corn futures fell even though the WASDE report showed a decrease in yield and production, which along with fund traders holding a large net short position set them up for a big short-covering rally. However, that did not materialize, said Charlie Sernatinger of Marex Capital. "No one seriously thinks there is serious upside on price from here," he said in a note. "There is a reason why the market is mired in a sideways channel; the corn may be fairly priced here, at least short term."
INSIGHT
Tight Picture: Thursday's WASDE report made clear that for soybeans the supply situation remains tight, with little to no room to adjust yields lower, said Arlan Suderman of StoneX in a note. Additionally, history shows that supply cuts during harvest time tend to extend beyond that, he says. "The agency has cut its soybean yield in both the September and October crop reports six times in the past 30 years, following that with another reduction in the November report in five of those six years," said Suderman.
Shifting Focus: Phil Flynn of Price Futures Group said in a note that "weather in South America will determine U.S. export potential in spring and summer 2024." Flynn adds that "Argentina is extremely dry, but could benefit later from improved moisture in the long run as El Nino remains intact. Central and northern Brazil are dry with forecasts trending warmer and drier." Planting is proceeding quickly in Brazil, with a record crop expected to affect demand for U.S. exports.
AHEAD
--The USDA will release its weekly grains export inspections report at 11 a.m. ET Monday.
--The USDA will release its weekly crop progress report at 4 p.m. ET Monday.
--The EIA will release its weekly ethanol production and stocks report at 10:30 a.m. ET Wednesday.
--The Federal Reserve Banks will release the Beige Book at 3 p.m. ET Wednesday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
10-13-23 1513ET
