By Kirk Maltais
--Corn for December delivery rose 1.1% to $5.53 a bushel, on the Chicago Board of Trade Thursday, amid better-than-expected export sales figures reported by the USDA this morning.
--Soybeans for November delivery rose 0.2% to $13.28 1/2 a bushel.
--Wheat for September delivery fell 0.6% to $7.12 3/4 a bushel.
HIGHLIGHTS
Export Support: Today's export sales report from the USDA, as well as a notice of a new flash sale of 300,000 metric tons of soybeans to unknown destinations, has grain futures on the CBOT higher Thursday. "While current crop year sales for corn and beans did not give campers much to write home about, new sales were not all that bad," said Dan Hueber of the Hueber Report. Sales of wheat and soybean exports fell within the estimates of traders surveyed by The Wall Street Journal this week, but corn sales beat targets -- across both marketing years, sales of U.S. corn for the week ended July 29 totaled 898,400 metric tons. Most of these sales were made for 2021/22 corn, with Mexico and Japan being the leading buyers.
Getting Ready: Much of the trading seen throughout the day is in anticipation of what the USDA's WASDE report next week may say about U.S. grain supplies and demand. "I expect some longs to exit positions as private trade groups are hinting for U.S. production to end up large for corn and soybeans, although demand for new-crop is picking up according to USDA export sales and latest USDA 24-hour announcement," said Terry Reilly of Futures International.
Technical Trading: Wheat futures trading on the CBOT finished down today, making it the third consecutive session that they've traded lower. However, much of this movement is technical in nature - with fundamentals still supportive for prices, said Arlan Suderman of StoneX. "Wheat prices got the short end of inter-market spreads, dragging them into the red," said Mr. Suderman. "Spring wheat fundamentals remain tight...USDA is expected to notably cut its production estimates for U.S. spring wheat, Canadian wheat, and for Russian wheat production in next week's WASDE report."
INSIGHTS
Balance of Things: Healthy conditions of corn and soybean crops in the Eastern Corn Belt are unlikely to outweigh the damage being done to crops in the Western and Northern Plains, said Linn & Associates. In estimates released today, the trading firm forecasts the national corn yield at 176.1 bushels per acre, and soybean yield at 49.5 bushels per acre -- both below the USDA's current estimates. "Record yield potential exists in many Eastern Belt states -- particularly Illinois, Indiana, Michigan, and Kentucky," said the firm. "Unfortunately, significant production losses have likely occurred in the west, especially looking at the Dakotas and parts of Minnesota. We think it will be very difficult to attain 'above trend-line yields' in corn, even if conditions turn near-perfect in the West."
Not Looking Likely: A potential decision by the Biden Administration to increase U.S. biofuel mandates would benefit corn prices - but such a decision is unlikely, said Capital Economics. According to the firm, U.S. President Biden is unlikely to implement a measure that would increase gasoline prices for consumers ahead of the 2022 midterm elections. "All told, we suspect that U.S. corn demand will hold steady over the next eighteen months as biofuel mandates are left unchanged," said the firm. "As a result, the global market will flip into a surplus, which underpins our view that the price of corn will fall to 450 US cents per bushel by end-2022."
AHEAD
--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 kirk.maltais@wsj.com
(END) Dow Jones Newswires
08-05-21 1458ET
