By Kirk Maltais
--Wheat for September delivery fell 1.5% to $5.77 a bushel on the Chicago Board of Trade on Friday, in response to research agencies increasing their outlook for the Russian wheat crop instead of cutting it due to weather events of recent months.
--Corn for July delivery fell 1% to $4.35 1/4 a bushel.
--Soybeans for November delivery rose 0.4% to $11.21 a bushel.
HIGHLIGHTS
Rosier Picture: After a brief start higher, wheat resumed its downtrend based on the outlook for supplies in the U.S. and abroad. "The series of downward revisions to the Russian wheat crop appears to be coming to an end," Commerzbank said in a note. "The Russian agricultural consultancy IKAR even revised its forecast slightly upwards to 82 million tons this week." Russian growing areas have been afflicted with drought in the southern portion of the country, along with frosts last month in Central Russia.
Currency Crunch: CBOT grains were under pressure from movements in global currencies, with the U.S. dollar on the rise while the Mexican peso and other world currencies slipped. The higher dollar is making U.S. export prices even less attractive for foreign buyers. This is after USDA export sales were largely weaker than anticipated by analysts surveyed by The Wall Street Journal this week. The U.S. dollar index rose 0.2%, while the Mexican peso was down 1.2% in afternoon trade. The Chinese yuan and the Brazilian real were mostly flat.
INSIGHT
Turning the Corner: JPMorgan forecasts a 25% turnaround in CBOT wheat futures by the end of the year. Wheat has fallen 7.6% year-to-date. The slide is what makes wheat futures an attractive choice for holding a long position, the firm said, with weather issues in the Black Sea seen as a longer-term issue that will push global wheat prices up. "Drought across the Black Sea Bread Basket has wilted production and export prospects of grains," said JPMorgan, adding that the drought affects both Russian and Ukrainian production.
Limited Concern: Some market watchers call CBOT grains oversold and due for a rebound, but attempts to establish a reversal in the recent downtrend have been met by resistance. One big reason for that is that traders and analysts don't feel like current weather threats to young U.S. crops are enough to derail what otherwise look like a record-size bumper crop. "The grain trade still has very little overriding concern for 2024 U.S. corn and soybean crops," Matt Zeller of StoneX said in a note. Northern states like Minnesota are receiving excessive rain, which could prove to be a sizable hit on U.S. crops, Zeller said.
AHEAD
--The USDA will release its weekly grains export inspections report at 11 a.m. ET Monday.
--The CFTC will release its weekly Commitment of Traders report at 3:30 p.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
06-21-24 1519ET
