By Kirk Maltais
--Wheat for September delivery fell 1.6%, to $5.45 1/2 a bushel, on the Chicago Board of Trade on Friday, sliding after the USDA's WASDE report showed a higher yield for the U.S. crop, running counter to concerns for crop health held by some traders.
--Corn for December delivery fell 1%, to $4.12 1/4 a bushel.
--Soybeans for November delivery fell 0.6%, to $10.07 1/2 a bushel.
HIGHLIGHTS
Choosing a Lane: The WASDE showed higher wheat production and yields, a pressure point for futures movement. But the report also showed a 25 million-bushel uptick to export demand for U.S. wheat, which could have been a reason to bid futures higher. But traders chose to focus more on the burdensome supply outlook. "When the dust settled, the market decided that trading the long term was not what capital was looking to do, and instead played for another weekend prehedges for harvest," said Charlie Sernatinger of Marex in a note.
Return Trip: With the USDA's WASDE report now past, changes made to the U.S. crop outlook were seen as underwhelming. So grain traders are quickly shifting back to trading on the upcoming weather outlook. "I think most of what the USDA showed us today was already penciled in and with no bull story," said Brian Pullam of Linn & Associates. "The market is back to trading U.S. weather, which looks to remain non-threatening for the next few weeks."
Washington Worries: Grain traders are also paying more attention to tariff threats and updates out of Washington. The static nature of the report means that the drama of tariff negotiations and posturing from the U.S. is naturally diverting trader attention, according to analysts. "Price action focused more on weather and trade issues than the WASDE data," said Karl Setzer of Consus Ag Consulting in a note. President Trump threatened to raise Canadian tariffs to 35%, which spooked markets.
INSIGHT
Tilting the Balance: The USDA's WASDE report also showed that demand for row crops may be reduced in many cases. The USDA lowers its outlook for corn use for animal feed, as well as its outlook for new-crop soybean export sales. Cutting demand when supply remains so large, particularly for corn, looks to make the U.S. supply-and-demand balance more supply-heavy, in turn weighing on futures heading into next week. "The market quickly reverted back to trading in anticipation that we will see USDA significantly bump corn and soybean crop sizes in August if the weather remains favorable," said Arlan Suderman of StoneX in a note.
Stable Start: Grains were nearly flat Friday morning ahead of the WASDE report. Some grain traders wanted to stand on the sidelines until the big report came out, looking for slight reductions in the USDA's outlook for acreage planted this spring, which in turn would translate into small moves lower for U.S. corn, soybean and wheat production. Had the report done this, then grain futures would have been likely to move up after its publishing, said Hedgepoint Global in a note before the WASDE's release.
AHEAD
--The USDA will release its weekly Grain Export Inspections report at 11 a.m. ET Monday.
--The USDA will release its weekly Crop Progress report at 4 p.m. ET Monday.
--The EIA will release its weekly ethanol production and stocks report at 10:30 a.m. ET Wednesday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
07-11-25 1540ET
