By Kirk Maltais


-- Corn for December delivery fell 6.3% to $4.95 a bushel on the Chicago Board of Trade on Friday as traders shed risk premium off of futures after the USDA reported far more planted acres than previously expected.

-- Wheat for September delivery fell 3.2% to $6.46 1/2 a bushel.

-- Soybeans for November delivery rose 6.1% to $13.42 1/2 a bushel.


HIGHLIGHTS


Defying Expectation: CBOT grain futures reacted in a big way after the release of the USDA's planted acreage and quarterly stocks reports, with corn posting higher acreage while soybean acreage have dropped significantly.

The USDA forecast planted acreage of over 94 million acres for corn, while soybean acres are forecast at roughly 83 million acres. It is a 2.2 million- acre uptick for corn, and a drop of roughly 4 million acres for soybeans.

As a result, analysts now see the balance sheet for U.S. corn as far more well-supplied, while higher prices are supported for soybeans.


Risk Removal: Traders amplified their selling as the market neared a close, as they are reconsidering their views on corn supply and demand, with higher production expectations looking to ease any concerns about unavailable corn.

"It removes nearly all need to ration corn and reduces the need for risk premium as well," said Karl Setzer of Mid-Co Commodities.


Derecho Effect: A derecho that spread from Nebraska to Indiana this week served to boost grain futures in early trading, with wind gusts of roughly 100 miles per hour reported in the affected area. While the wind gusts are believed to have damaged crops, their effect was limited to early in the session.

"This would have been much more destructive if it occurred later in the season, in our opinion," said Terry Reilly of Futures International in a note.


INSIGHT


Change of Pace: Grain traders were surprised by the results of the USDA's acreage reports, suggesting a healthy spring helped bolster corn planting while stifling heat and dryness in June impaired soybean planting.

The figures now make the daily weather forecast less of a market mover.

"These numbers are a game changer for the markets," said Arlan Suderman of StoneX in a note. "The planted acreage numbers will be debated, but this is what the market will trade."

Suderman added that supply for soybeans now has no "margin of error," while corn has some leeway for tough weather conditions.


Long Way to Go: Grain futures experienced volatility Friday, but indications traders have about the market are subject to change as the summer progresses.

"With a long time to go to finish out the growing season, there is potential to see a bounce," said Doug Bergman of RCM Alternatives in a note. The growing season for U.S. crops typically goes from June to September, with harvest season commencing in October and November.


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 monthly grain crushings report at 3 p.m. EDT Monday.

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


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


(END) Dow Jones Newswires

06-30-23 1608ET