By Kirk Maltais
-- Wheat for March delivery fell 3.4% to $5.65 1/2 a bushel on the Chicago Board of Trade on Thursday, with the USDA's new outlook on the 2024-25 showing higher ending stocks compounded by Russian exports growing cheaper.
-- Corn for March delivery fell 1.5% to $4.17 3/4 a bushel.
-- Soybeans for March delivery fell 0.6% to $11.63 a bushel.
HIGHLIGHTS
Moving in Tandem: The USDA's estimates of high production and ending stocks across the board put a negative pall on agricultural futures.
For wheat, that was exacerbated by Russia's pricing pressure on world exports.
"Russia is still the deal here, and the nearby stuff is still under pressure for the export FOB's," said Charlie Sernatinger of Marex in a note.
The availability of cheap wheat from Russia has been a pressure point for U.S. grains in recent sessions.
As Expected: The USDA did what traders and analysts expected and forecast a robust U.S. crop in the upcoming growing season, which is expected to grow stockpiles as demand from China falters.
Corn planted is expected at 91 million acres, soybeans at 87.5 million acres, and wheat at 47 million acres.
For corn and wheat this would be a decline from last year, although the acreage is seen as still strong.
Chinese demand for exports is expected to be weaker on economic concerns there, which will cut into demand for U.S. crops over South American competition, said Seth Meyer of the USDA at the agency's Agricultural Outlook Forum.
Told You So: U.S. grain export sales met the less-than-lofty expectations of surveyed analysts for the week through Feb. 8, seeming to reinforce what the agency said during its forum about weak export sales.
In its weekly report, the USDA said wheat sales totaled 397,300 metric tons across the 2023-24 and the 2024-25 marketing years. Corn sales were 1.31 million tons, and soybean sales were 377,800 tons.
These figures fell within the forecast ranges from analysts surveyed by The Wall Street Journal.
INSIGHT
Follow the Pattern: The USDA's initial projections for the 2024-25 crop year posted yields and acreage that are relatively high, but some analysts have pointed out that the final estimates have tended to fall back from the agency's initial take in recent years.
"Final corn yields have fallen short of Ag Forum estimates now in five straight seasons," said Matt Zeller of StoneX in a note.
This may provide futures with some relief from their recent downward trend.
It Gets Worse: Grain traders see a possibility for corn to drop below the $4-a-bushel mark for the first time since November 2020.
"$4.14 in corn needs to hold or else $3.89 is my next downside target," said Jeff French of AgHedgers. "They have thrown everything bearish at this market but the farmer is still holding too much cash corn on-farm."
Grain traders increasingly view CBOT grains such as corn as "oversold" as fund traders continue to hold their huge short positions, but so far nothing has prompted the market to engage in any rush of short covering.
Back to Normal: The water levels on the Mississippi River have returned to normal, this after being low because of drought for an extended period of time, according to the U.S. Army Corps of Engineers.
USACE said that the drought conditions have been in place since September 2022, but no dredging has been needed since January, leading to them declaring the end of the drought.
Approximately 589 million tons of cargo are moved on the Mississippi River annually, with 25% of that being grains, according to the USDA. Delays in shipping on the river impacted export sales of grains during the drought.
AHEAD
-- The USDA will hold the second day of its Annual Agricultural Outlook Forum in Arlington, Va., beginning at 8 a.m. EST Friday.
-- The USDA is scheduled to release its annual Farms and Land in Farms report at 3 p.m. EST Friday.
-- The CFTC is due to release its weekly Commitments of Traders Report at 3:30 p.m. EST Friday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
02-15-24 1542ET
