Soybean Futures Fall as Traders Position for WASDE — Daily Grain Highlights

By Kirk Maltais

--Soybeans for July delivery fell 1.5% to $12.10 1/4 a bushel on the Chicago Board of Trade on Thursday, on expectations of the latest World Agricultural Supply and Demand Estimates would show growing U.S. production.

--Corn for July delivery fell 0.3% to $4.57 1/4 a bushel.

--Wheat for July delivery rose 0.5% to $6.37 1/4 a bushel.

HIGHLIGHTS

Getting Ready: Traders prepared for potential risk of Friday's WASDE showing better-than-expected U.S. crop production by selling throughout the day, particularly corn and soybeans contracts. "Earlier in the week funds were liquidating short positions, but then the market ran into strong farmer selling and the funds went right back to selling," Tomm Pfitzenmaier of Summit Commodity Brokerage said in a note.

Sudden Damage: Wheat's gains were driven by issues with frost in Russia. "Three of Russia's key grain-growing areas declared a state of emergency on Wednesday, citing May frosts that have caused severe damage to crops and will reduce this year's harvest," AgMarket.net said in a note. The widespread damage to crops in the region are seen as putting constraints on what was previously seen as a large crop out of Russia, the world's largest source of wheat exports.

As Expected: U.S. grain export sales fell within the estimates of analysts surveyed by The Wall Street Journal. The USDA said that for the week ended May 2, wheat export sales totaled 447,100 metric tons across the 2023/24 and 2024/25 marketing years. Corn sales totaled 938,300 tons across both marketing years, and soybean sales totaled 433,500 tons. All three of these figures are within the estimates of analysts surveyed by The Wall Street Journal.

INSIGHT

Switching Gears: After WASDE, traders may take the opportunity to buy back into grains, especially if the report shows any deviation from analysts' expectations. "Funds are likely to see any sizeable weakness as a buying opportunity heading into the heart of the 2024 growing season," AgResource said in a note.

Out With the Old: The global climate is expected to transition away from El Niño over to a neutral climate system in May, the NOAA's Climate Prediction Center said. The agency forecasts a roughly 50% chance for a La Niña system to develop in June through August, and a 70% chance of La Niña developing between July through September. The naturally occurring climate pattern can cause drought in the southern U.S. and heavy rains and flooding in the Pacific Northwest and Canada.

AHEAD

--The USDA will release its monthly World Supply and Demand Estimates report at noon ET Friday.

--The CFTC will release its weekly Commitment of Traders report at 3:30 p.m. ET Friday.

--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.

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

(END) Dow Jones Newswires

May 09, 2024 15:16 ET (19:16 GMT)

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