By Kirk Maltais
--Wheat for December delivery fell 2.6%, to $8.06 1/2 a bushel on the Chicago Board of Trade Wednesday, in reaction to the USDA's WASDE report showing increased wheat production out of some states.
--Corn for December delivery fell 0.5% to $6.64 1/2 a bushel.
--Soybeans for January delivery rose 0.4% to $14.52 a bushel.
HIGHLIGHTS
Better Than Expected: The November WASDE report from the USDA includes new estimates for global production of wheat--raising that total figure up roughly 1 million metric tons, with production increases in countries like Australia offsetting reductions in places like Argentina and the EU. Russian and Ukrainian production were left unchanged by the USDA. "World numbers did not bring the Argentine wheat production down enough, and raised Australia and Kazakhstan," said Charlie Sernatinger of ED&F Man Capital in a note following the report's release. The perception of higher-than-expected wheat supplies took futures down in afternoon trading.
Buying Opportunity: End users grappling with high commodity prices were said to have taken advantage of a brief drop in CBOT grain futures following the release of the WASDE report--particularly for corn and soybeans, driving those prices higher briefly. For end users, the tepid reaction to the limited changes the USDA made to its balance sheet for row crops presented a buying opportunity, said Jason Roose of US Commodities. "Out in the country, you're seeing some areas where the basis is still tight," Mr. Roose told the WSJ, noting that end users have been aggressive in pursuing price breaks.
Wave of Sales: The USDA has announced a new round of flash sales for U.S. soybeans, coming after sales of corn and soybeans were announced for multiple destinations Tuesday. The USDA says that 264,000 metric tons of soybeans were sold to China for delivery during the 2022/23 marketing year, while another 198,000 tons of soybeans were sold for delivery to unknown destinations in 2022/23.
INSIGHTS
Conservative Approach: Grain traders reacted to this afternoon's WASDE report with a lack of enthusiasm, with the USDA generally staying within analyst expectations for changes to the grains balance sheet--even opting not to make changes in some key categories. "A wholesale bearish report was avoided with the USDA up only a bit on yields and production and leaving export estimates unchanged for now," said Matt Zeller of StoneX in a note following the WASDE's release.
Beating the Forecast: Daily production of ethanol in the U.S. has risen to a level above where analysts surveyed by Dow Jones this week had expected. In its latest weekly report, the U.S. Energy Information Administration said that daily production of U.S. ethanol rose to 1.051 million barrels per day for the week ended Nov. 4. This is up from 1.04 million barrels per day reported last week, and marks the highest production has been since late June. Analysts surveyed by Dow Jones had forecast daily production to land anywhere between 1.022 million barrels and 1.05 million barrels per day. Daily production is now 1.2% higher than where it was at this time last year.
AHEAD:
--The USDA will release its weekly export sales report at 8:30 a.m. ET Thursday.
--The USDA will be closed in observance of Veteran's Day on Friday. It will reopen on Monday.
--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
11-09-22 1517ET
