By Kirk Maltais
-- Wheat for September delivery fell 4.2% to $6.32 3/4 a bushel on the Chicago Board of Trade on Wednesday, and grain futures across the board dropped in reaction to the minor changes made by the USDA to its projections versus those from last month.
-- Corn for December delivery fell 3.5% to $4.83 3/4 a bushel.
-- Soybeans for November delivery fell 2.4% to $13.27 3/4 a bushel.
HIGHLIGHTS
Sharp Drop: Grain futures fell sharply after the USDA released its July WASDE report. Some traders were unsatisfied with the limited changes made to yields and production outlooks.
The USDA revised its production outlook for corn higher, despite a lower yield. Soybean yields were left unchanged, a surprise to traders that thought the dry weather of June had taken a bite out of them.
"Anyone looking for bullish bean numbers out of this just got their head lopped off," said Charlie Sernatinger of Marex in a note following the report.
Demand Adjustments: Grain traders put most of their focus on the USDA's yield adjustments, but demand figures were also adjusted in the WASDE, resulting in higher ending stocks for corn and wheat versus the previous month.
Soybean ending stocks were lower than last month, but over 100 million bushels higher than projected by analysts surveyed by The Wall Street Journal.
These figures contributed to the pressure placed on grain futures.
INSIGHT
Skepticism Lingers: Losses that hit after the WASDE release pulled back somewhat as the day progressed, although they eventually sank before the end of the day.
Some traders remain skeptical the data issued by the USDA on Wednesday and in last month's acreage report are accurate, said Dave Marshall of AgTraderTalk.com. For soybeans in particular, the question among traders is whether planted acreage is really down 4 million acres, he said.
"There's just this lingering doubt on whether the acreage report was believable."
Production Decline: Production of ethanol in the U.S. fell for the week ended July 7, posting its first decline in a month, according to EIA data. In its latest weekly report, the EIA said that average daily ethanol production for the week was 1.032 million barrels a day.
That is down from 1.06 million barrels a day reported by the EIA last week, and below the estimated average of analysts surveyed by Dow Jones Newswires, which ranged from 1.036 million barrels to 1.068 million barrels a day.
AHEAD
-- Conagra Brands is scheduled to release its fiscal 4Q earnings report at 7:30 a.m. EDT Thursday.
-- The USDA is due to release its weekly export sales report at 8:30 a.m. EDT Thursday.
-- The CFTC is scheduled to release its weekly commitments of traders report at 3:30 p.m. EDT Friday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
07-12-23 1607ET
