By Kirk Maltais


--Corn for December delivery rose 1.7% to $4.02 a bushel on the Chicago Board of Trade on Monday, after the WASDE report from the USDA included a bump of 75 million bushels to export sales expectations.

--Wheat for September delivery fell 1.2% to $5.36 a bushel.

--Soybeans for November delivery fell 1.5% to $9.88 1/4 a bushel.


HIGHLIGHTS


Out of the Spiral: Corn avoided finding a new multi-year low Monday, instead finding strength from the USDA's WASDE report showing that better export demand may partially offset the large crop seen in U.S. fields this year. "Corn exports are strong, so that's a solid factor for futures," said Virginia McGathey of McGathey Commodities. On the supply-side, corn production fell mostly in line with analyst estimates, with a record-high yield of 183.1 bushels an acre forecast.

Smashing Records: Higher planted soybean acres combined with a record-high yield to put the USDA's soybean production outlook at its highest ever. At 4.59 billion bushels, it would smash the previous record of 4.46 billion bushels in 2021 if output holds at this level through the harvesting season. The uptick in output looks to also send soybean ending stocks up by 125 million bushels by the end of the year to 560 million bushels, which is a big source of pressure for futures post-report, said Naomi Blohm of Total Farm Marketing in a note.

Paring Shorts: Short positions held in grain futures by fund traders slimmed for the week ending Aug. 6, which gave traders the go-ahead to do some selling in advance of the WASDE, even though grains are already trading at multi-year lows. In its latest Commitments of Traders report issued Friday, the CFTC said that fund traders reduced shorts in corn by over 41,000 contracts, while wheat shed just over 12,000 contracts and soybeans trimmed shorts by over 8,600 contracts. The closure of corn shorts proved to be a preview of market sentiment later in the day, while the comparatively slight movement in soybeans and wheat was reflected in their closes.


INSIGHT


Looking South: In addition to a larger outlook for soybean production domestically, competition from South America--chiefly Brazil and Argentina--looks to be onerous in the 2024/25 marketing year. "The bean outlook only got worse, with U.S. stocks now larger and the South American crop still massive," said Doug Bergman of RCM Alternatives in a note regarding Monday's WASDE report from the USDA. Soybeans may prove to be a consistent source of pressure for the entire complex in the coming days, said Bergman.

The World at Large: U.S. bumper crops of soybeans and corn may partially offset their effect on the world supply-and-demand balance with struggles with weather overseas, said Don Roose of U.S. Commodities. The 2024/25 ending stock outlook for world wheat reported in the August WASDE totals 257.2 million metric tons, slightly lower than anticipated by analysts surveyed by The Wall Street Journal. "The rest of the world has had weather problems where the U.S. has not," said Roose, adding that these weather problems look to have had less influence on soybeans than corn.

Weathering Global Volatility: Last week's spurt of global volatility had only a small impact on commodity futures, said Benjamin Hoff of Societe Generale in a note. "Money manager positioning in commodities remained largely unchanged during the week," said Hoff, adding that negative sentiment has already been priced into commodity futures this year. "This has structurally inoculated the asset class from the type of savage carry trade unwinding dynamics witnessed in equities early last week," he said.


AHEAD


--The EIA will release its weekly ethanol production and stocks report at 10:30 a.m. ET Wednesday.

--The USDA will release its weekly export sales report at 8:30 a.m. ET Thursday.

--The CFTC will release its weekly Commitment of Traders report at 3:30 p.m. ET Friday.


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


(END) Dow Jones Newswires

08-12-24 1531ET