By Kirk Maltais


--Wheat for September delivery rose 0.8%, to $5.42 1/4 a bushel, on the Chicago Board of Trade on Friday, responding to cuts to supply outlooks in both Russia and France.

--Corn for December delivery fell 0.4%, to $3.95 1/2 a bushel.

--Soybeans for November delivery fell 0.7%, to $10.02 a bushel.


HIGHLIGHTS


Commence Cutting: Wheat rose Friday after Russian agricultural research firm SovEcon said in a note that it has reversed course on its outlook for the size of the nation's wheat crop. SovEcon now sees it falling to 82.9 million tons from 84.7 million metric tons. "This adjustment reflects a smaller area figure recently reported by Russia's statistical agency, Rosstat--28.5 million hectares compared to SovEcon's earlier estimate of 29.2 million hectares--as well as lower yield projections," the firm said in a note. Forecasts for French wheat production are projected at the lowest level since 1986, at 26.3 million metric tons. "It is more evidence that perhaps the world cash wheat market may be carving out a broad bottom currently," said Arlan Suderman of StoneX in a note.

Finding the Bottom: Traders continue to position for any potential surprises ahead of Monday's WASDE report. Most expect the report to show larger crop yields for corn and soybeans than initially forecast by the USDA. The possibility of an even-more-onerous crop than otherwise expected is creating expectations for further drops in prices. "The market has priced in a lot of bearishness with prices low enough to deter production for next year," Doug Bergman of RCM Alternatives said in a note. "The downside risk from here is expected to be limited."


INSIGHT


Lingering Pain: The last bit of progress needed to bring inflation to target levels is hard to come by, according to John Payne of Advance Trading in a note. In turn, this is keeping pressure on grain and livestock futures, despite the large amount of selling already seen this year. Payne adds that it's also possible that with the large build of short positions among fund traders, that pressure may not stick. "We saw on Monday, as the managed money took losses in all of their bullish bets...we saw short covering in their bearish bets and prices actually rallied," said Payne. "Outside of the fundamental story that is the massive U.S. crop, this is worth paying attention to."

Inflation Pace: Brazil's inflation accelerated in July, likely making it harder for the central bank to resume the interest-rate reduction cycle started a year ago and interrupted in June. The national statistics agency IBGE said Friday consumer prices last month rose at a 4.5% clip in 12 months, up from 4.2% in June. A weakening currency is seen as one of the reasons why inflation remains hot, since it makes imports more expensive. With the real down 12% against the U.S. dollar this year, Brazilian grain exports look better as a purchasing option on the world stage.


AHEAD


--The USDA will release its weekly grains export inspections report at 11 a.m. ET Monday.

--The USDA will release its monthly World Agricultural Supply and Demand Estimates report at noon 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

08-09-24 1540ET