By Paulo Trevisani
-- Wheat for September delivery fell 0.9% to $7.75 3/4 a bushel on the Chicago Board of Trade Friday as grains began to flow out of Ukraine at a slow pace and U.S. weather remains a concern.
-- Soybeans for November delivery fell 0.6% to $14.08 3/4 a bushel.
-- Corn for December delivery rose 0.7% to $6.10 a bushel.
HIGHLIGHTS
Recession Fears: The USDA reported soybean export sales of 132,000 metric tons to China, plus 132,000 tons to unknown destinations, both for delivery during the 2022-23 marketing year.
Meanwhile, U.S. labor data came in much stronger than expected, fueling fears the Fed could tighten too much and create a demand-destroying recession. Geopolitical risks remained on traders' minds.
"There are still concerns about Chinese retaliation and the weakness in the energy markets is bothersome," Tomm Pfitzenmaier, from Summit Commodity Brokerage, said in a newsletter.
FX Effect: A resilient labor market weakened grain futures as higher-than-expected employment boosted the U.S. dollar, Terry Reilly, from Futures International, told WSJ.
July saw the addition of an astonishing 528,000 jobs in the U.S., driving the unemployment rate even lower to 3.5%. That makes higher interest rates more likely, supporting demand for the dollar and pushing the DXY dollar index up nearly 1%.
"With the U.S. dollar screaming higher, that's keeping a lid on any potential gains in the market," Mr. Reilly said.
INSIGHT
Ship by Ship: Grains are trickling out of Ukrainian ports, "but logistical challenges look to prevent any explosion in grain flows there," AgResource said in a report.
The first convoy of ships carrying Ukrainian grain sailed from Odessa Friday morning, in a sign that last month's agreement with Russia is holding. The convoy was reported as carrying nearly 60,000 metric tons of corn.
The shipment follows a test run by a Sierra Leone-flagged ship, which left Odessa on Monday with Lebanon as its final destination.
"Thus far, it appears Ukrainian sea shipments will be rather piecemeal," AgResource said.
Watching Clouds: Weather forecasts for the weekend are mixed, leading to "mediocre volume" in CBOT futures trading, AgResource said in a report as corn showed some strength while beans and wheat prices declined.
"It's clear end users/importers are rewarding the break in corn with new purchases, but it remains that a clear trend won't be established until U.S. crop sizes are better known," AgResource said, noting that NASS's yield estimates are due Friday.
The market "is beginning to pencil in severe yield loss across much of the Plains and mid-South, which on the margin will weigh on national output even assuming normal E Midwest conditions," the report said.
AHEAD
-- Tyson Foods Inc. is scheduled to release its third-quarter earnings report before the stock market opens Monday.
-- The USDA is due to release its weekly grains export inspections report at 11 a.m. EDT Monday.
-- The USDA is scheduled to release its weekly crop progress report at 4 p.m. EDT Monday.
-- Ingredion Inc. is due to release its second-quarter earnings before the stock market opens Tuesday.
-- The EIA is scheduled to release its weekly ethanol production and stocks report at 10:30 a.m. EDT Wednesday.
-- The USDA is due to release its weekly export sales report at 8:30 a.m. EDT Thursday.
-- The USDA is scheduled to release its monthly World Supply and Demand report at noon EDT Friday.
-- The CFTC is due to release its weekly commitments of traders report at 3:30 p.m. EDT Friday.
Write to Paulo Trevisani at paulo.trevisani@wsj.com
(END) Dow Jones Newswires
08-05-22 1553ET
