By Kirk Maltais
--Soybeans for May delivery rose 2.1% to $15.09 a bushel on the Chicago Board of Trade on Friday, after two reports issued by the USDA showing a tighter picture for ending stocks than previously anticipated.
--Corn for May delivery rose 1.4% to $6.60 1/2 a bushel.
--Wheat for May delivery was virtually unchanged at $6.93 a bushel.
HIGHLIGHTS
Tight Balance: Soybean planted acreage came in less-than-expected government reports showed on Friday, propelling futures higher in afternoon trading. "Given 87.5 million acres of new crop soybeans and a trend line yield of 52 [bushels per acre], ending stocks stay tight year over year," Craig Turner of Daniels Trading said in a note. "My big takeaway is that soybeans will be very volatile this spring and summer." Analysts surveyed by The Wall Street Journal had expected planted acreage of 88.2 million acres.
Looking for Lows: The USDA's Prospective Plantings and its Quarterly Stocks reports showed higher-than-expected planted acreage and stockpiles of U.S. wheat, putting new pressure on the most-active futures contract. However, this pressure may not last. "If we don't make new lows after [Friday's] bigger acreage base, I think we likely have made a seasonal low in wheat," Global Commodity Analytics' Michael Zuzolo said in a note. Earlier this month, wheat futures fell to $6.62 a bushel, the lowest since July 2021.
Money Flow: While grain traders largely focused on the results of the USDA's reports, they are getting support along with other commodities from data showing core inflation easing. The Bureau of Economic Analysis said the core personal-consumption expenditures price index -- one of the Federal Reserve's preferred gauges of inflation -- climbed 4.6% in February from a year earlier, and down from 4.7% the prior month. "Lower-than-expected inflation data provided an additional boost for stocks this morning, while those easing fears on Wall Street allowed money to flow into the broader commodity sector to start the day as well," StoneX's Arlan Suderman said in a note.
INSIGHT
Taking Advantage: The Prospective Planting report showed U.S. farmers planting 92 million acres of corn this spring, which would be up from 88.6 million acres planted last year, and top analyst estimates of 90.9 million. With fertilizer prices down 24% since the start of the year, according to Green Market's North American index, farmers are taking advantage of that to plant more corn. While corn prices are down from this time last year, they're still up 17% from March 2020. "Farmers want to get all the acreage they can planted," said Mark Milam of ICIS. "The thought is that farmers will be gung-ho and plant as much as they can."
Good Signs: Ahead of Conagra Brands Inc.'s quarterly results next week, Credit Suisse said recent strong reports from General Mills Inc. and McCormick & Co. Inc are a good omen and that packaged foods are benefiting from aggressive pricing and moderating inflationary headwinds. The analysts see little risk to margin guidance given Conagra has a wide gap between pricing and expected cost inflation.
Short Term: Pressure on commodity prices seen in recent trading sessions maybe short-lived, "unless the banking shock spreads to the wider economy," Fitch Ratings said in a report. The global oil market is largely balanced, and price volatility "will be driven by geopolitical tensions, the health of the global economy and China's oil demand evolution following reopening," Fitch said.
AHEAD
--The USDA will release its weekly grains export inspections report at 11 a.m. ET Monday.
--The USDA will release its monthly grains crushing report at 3 p.m. ET Monday.
--The USDA will release its first weekly crop progress report at 4 p.m. ET Monday.
Patrick Sheridan and Stephen Nakrosis contributed to this article.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
03-31-23 1619ET
