By Kirk Maltais


--Wheat for December delivery fell 6.6% to $5.40 3/4 a bushel, on the Chicago Board of Trade on Friday, with heavy selling taking place after the USDA reported both higher production and higher stockpiles than expected by analysts.

--Corn for December delivery fell 2.4% to $4.76 3/4 a bushel.

--Soybeans for November delivery fell 2% to $12.74 3/4 a bushel.


HIGHLIGHTS


Off a Cliff: CBOT grain futures took a steep dive in trading following the release of the USDA's Quarterly Grain Stocks and Small Grains Summary reports, which kept corn and wheat balance sheets loose and eased potential issues with soybeans. The USDA says soybean stocks are at 268.2 million bushels, wheat stocks at 1.78 billion bushels, and corn stocks at 1.36 billion bushels -- soybean and wheat coming in higher than analyst forecasts, while corn is lower. "Definitely bearish on the wheat, definitely friendly on the corn, and definitely bearish on the beans," said Charlie Sernatinger of Marex in a note.

Running Out of Time: The results of the USDA's reports were not supportive for grain futures today, and the nearing shutdown of the U.S. government is only adding to that pressure. "If the trade keeps buying the US dollar as a safe-haven, and we have no October WASDE, I'm concerned the downside could be pushed," said Mike Zuzolo of Global Commodity Analytics in a note. As of now, the government has a little less than 1.5 days to reach some sort of compromise to keep it open. Should it close, then traders and analysts may be deprived of the USDA's harvest data.


INSIGHT


Limited Downside: The USDA's reports hit futures with a wave of pressure, but only a limited move in prices are expected going forward. "South American weather worry along with variable U.S. corn and disappointing U.S. soybean yields limits nearby downside price risk," said AgResource in a note.

Rally Potential: Not only is a limited downside expected following the report's release, corn in particular might see a quick turnaround. "I'm not counting out the possibility of a short-term rally in corn futures," said Jake Hanley of Teucrium Trading. "With today's selling, shorts may take the opportunity to take gains, watch next Friday's COT report for any indication that shorts are lightening up a bit."

Leading Loser: For the third quarter of 2023, wheat futures were among the leading losers in commodities. Including today's selling, wheat has dropped 17% since the start of the quarter. Pressure on wheat came in large part from Russia's plentiful supplies hitting the export market and driving prices lower. "Looking at the bigger global situation, wheat supplies remain historically tight," said Doug Bergman of RCM Alternatives. "But, that hasn't translated to any upside in prices as there are plenty of willing sellers on the global market for now."


AHEAD


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

-The USDA will release its monthly Grain Crushings report at 3 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

09-29-23 1504ET