Wheat Futures Drop as Profit-Taking Extends — Daily Grain Highlights

By Kirk Maltais

-- Wheat for December delivery fell 2.2% to $5.90 1/4 a bushel on the Chicago Board of Trade on Friday, with profit-taking continuing into the session on views around export business in the Black Sea.

-- Soybeans for November delivery fell 0.8% to $10.37 3/4 a bushel.

-- Corn for December delivery fell 0.7% to $4.25 1/4 a bushel.

HIGHLIGHTS

Turning Back: Profit-taking gripped wheat overnight into Friday's trading session.

Moving futures lower was reports that Egypt -- a major wheat importer -- will change its state-subsidized bread recipes to use more corn and sorghum flour, limiting its need for wheat going forward. This, along with Russian export prices being lower than quoted earlier this week, pressured CBOT wheat, said AgResource in a note.

Wheat fell below the $6 a bushel threshold for the first time since June.

Harvest Influx: Harvesting has ramped up in the U.S. this week, with more harvested grains being sold into the market.

"Driving through Iowa as we speak, the whole Midwest is running hard," said Tommy Grisafi of Advance Trading.

The USDA will update the harvesting progress of farmers on Monday with its next crop progress report. In its previous report, the USDA said the corn harvest is 21% complete, and the soybean harvest is 26% done.

INSIGHT

Support Source: Estimates issued by StoneX earlier this week put pressure on grain futures, after it projected both corn and soybean yields to rise from already-record levels.

But that outlook isn't shared by other analysts, who instead contend that abnormal heat has eaten into crop yields late in their development.

"September in Omaha was the driest on record with 0.09 [inches] of rain," said Sterling Smith of AgriSompo. "While soil moisture levels were good to excellent, the drop off was severe, and these yield levels are still very lofty."

Smith projects the national corn yield at 182.3 bushels an acre and soybeans at 52.9 bushels an acre, less than the USDA projected last month.

Critical Point: Rainfall is expected in Brazilian crop-growing areas over the weekend going into next week, which may be an issue for farmers attempting to finish their planting in southern areas.

"We are now at a point where it is getting critical for them," said Karl Setzer of Consus Ag Consulting. "Soybean planting can still take place, but it's going to make it tough to get a safrinha crop as large as the one being predicted if we see additional delays." For areas further north, however, increased rainfall is expected to be positive for soil moisture.

Big Volume: In a notice, the USDA reported new flash sales of soybeans to China, along with a sale of corn to unknown destinations.

The agency says that 116,000 metric tons of soybeans have been sold to China for delivery in the 2024-25 marketing year, and 198,000 tons of corn were sold to unknown destinations for delivery in 2024-25. The designation "unknown destinations" is understood by the U.S. agricultural market to usually mean China, although that isn't always the case.

AHEAD

-- The USDA is scheduled to release its weekly grains export inspections report at 11 a.m. EDT Monday.

-- The USDA is due to release its weekly crop progress report at 4 p.m. EDT Monday.

-- The EIA is scheduled to release its weekly ethanol production and stocks report at 10:30 a.m. EDT Wednesday.

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

(END) Dow Jones Newswires

October 04, 2024 15:24 ET (19:24 GMT)

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