By Kirk Maltais


--Corn for March delivery rose 0.7% to $6.77 a bushel on the Chicago Board of Trade on Friday, with momentum from Thursday's USDA reports.

--Soybeans for March delivery rose 0.7% to $15.30 3/4 a bushel.

--Wheat for March delivery rose 0.1% to $7.45 a bushel.


HIGHLIGHTS


Riding the Wave: Despite speculation that momentum from the USDA's reports would wind down, grains instead were lifted throughout the trading session as traders mulled what the latest estimates mean. "Corn was up again on spillover buying from yesterday's USDA numbers," said Charlie Sernatinger of Marex in a note. Dryness in Argentina also provided corn futures with support, although soybeans are seeing more of that support.

Dried Out: Drought concerns appear to be easing in the U.S. but continue to affect Argentina's crops, particularly soybeans. "Soybean traders are largely focused on Argentina's drought, which is indeed intense," said Arlan Suderman of StoneX in a note. "Forecast models continue to show increasing chances of showers in the last half of this month, but confidence is not high." The USDA reduced its expectations for Argentina soybean production by 4 million metric tons in its WASDE report.

Abundant Supplies: The USDA's unexpected cut to harvested area boosted corn and soybean futures. While wheat stocks were lower than expected, traders remain cautious about the world supply and demand picture for wheat. "There are still ideas of weak demand and big Russian production that should help foster price weakness in the world market," said Jack Scoville of Price Futures Group in a note. "The demand for U.S. wheat in international markets has been a disappointment all year and was hindered by low prices and aggressive offers from Russia."


INSIGHT


In Transition: The outlook by the NOAA's Climate Prediction Center that the La Niña climate is expected to shift over to a more neutral climate in the Northern Hemisphere this spring has traders considering if the U.S. is in for better weather this growing season. "Save for Argentina, most other key areas [are] doing well as even [the] subsoil moisture situation has improved in Western Corn Belt and Plains," Joel Karlin of Ocean State Research said. An early indicator of what the growing season may look like will be the USDA's Prospective Planting report in March.

Faster Pace: China's progress in reopening its economy after pivoting from zero-Covid restrictions appears to be happening faster than expected. "Whereas we previously thought the first quarter would bring the worst of the economic disruption from surging Covid cases, it now appears the worst is behind us and that the end of zero-Covid and a renewed focus on pro-growth policies will spur Chinese economic growth sooner than expected," said Caroline Bain of Capital Economics in a note. As a result, China's demand for commodities like industrial metals and agriculture is expected to support global prices in the coming months, she said.


AHEAD


-The USDA and the CBOT will be closed in observance of Martin Luther King Jr. Day on Monday, reopening on Tuesday.

-The USDA will release its weekly grains export inspections report at 11 a.m. ET Tuesday.

-The EIA will release its weekly ethanol production and stocks report at 11 a.m. ET Thursday.

-The USDA will release its monthly livestock slaughter report at 3 p.m. ET Thursday.


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

(END) Dow Jones Newswires

01-13-23 1504ET