By Kirk Maltais
-- Corn for July delivery fell 5.6% to $6.74 3/4 a bushel on the Chicago Board of Trade Thursday, in response to inflation worries gripping overall markets and Wednesday's WASDE showing a supply picture that's roughly what analysts expected.
-- Soybeans for July delivery fell 3.6% to $15.85 a bushel.
-- Wheat for July delivery fell 3.4% to $7.05 1/2 a bushel.
Limit Down: Corn futures trading on the CBOT hit their trading limits lower midday Thursday--with a 40-cent drop from the previous day. Inflation woes and a less-than-compelling WASDE report helped spark the correction, but how long it lasts depends largely on what weather in the U.S. and South America does going forward--if unfriendly weather will stifle or allow planting in the U.S. along with the harvest of the second corn crop in Brazil. "Environmental conditions over the next few months will still be the determining element for this year's [U.S.] crop yield," said Marex Spectron. Frost and freeze conditions have been seen in the Midwest in recent days, but temperatures are expected to turn warmer next week, according to DTN.
Peak Perception: Data showing inflation continuing to grow in the U.S. economy--with the producer price index growing at its fastest annual pace since the BLS began tracking the data in 2010--was a main pressure point for commodities prices Thursday. While selling was seen across commodities, for grains the reversal is from nearly all-time highs. "I have to suspect that without an actual weather disruption this summer, we have reached the peak," said Dan Hueber of the Hueber Report.
Forget the Old Crop: Buyers of U.S. grain exports have pulled back from acquiring product from the current marketing year, according to data from the USDA released this week. For corn, a reduction of 334,300 metric tons in 2020/21 sales to China, as well as 192,600 tons to unknown destinations, left overall 2020/21 sales through the week ended May 6 at minus 113,400 tons. Meanwhile, net sales of 2020/21 wheat were only 30,300 tons and net sales of 2020/21 soybeans were 94,300 tons.
Filling the Void: Although enthusiasm for old-crop exports looks to be subsiding, the USDA has confirmed a new flash sale of U.S. corn exports to China on Thursday, with China purchasing 680,000 metric tons of corn for delivery in the 2021/22 marketing year. Among grains traders, the recent streak of announcements confirming new purchases for the new crop year suggests that although export buyers are balking at the high prices old-crop exports command, they still need to purchase U.S. grains.
On the Go: U.S. grain shipments rose for the week ended May 1, the USDA reported in its weekly Grains Transportation Report on Thursday. According to the USDA, U.S. Class I railroads originated 28,097 grain carloads for the week, up 10% from last week and 24% more than last year. Meanwhile, barge grain movements totaled 1,004,586 tons for the week ended May 8, 50% more than last week and 18% higher than this time last year. The uptick in grain movement comes as grain elevators are reported paying a premium to CBOT futures in some areas of the country, in an effort to spur farmers to sell more grains.
--The CFTC will release its weekly commitment of traders report at 3:30 p.m. ET Friday.
--The USDA will release its weekly export inspections report at 11 a.m. ET Monday.
--The USDA will release its weekly crop progress report at 4 p.m. ET Monday.
Write to Kirk Maltais at email@example.com
(END) Dow Jones Newswires