By Kirk Maltais
-- Wheat for July delivery fell 3.4% to $6.25 1/2 a bushel on the Chicago Board of Trade on Wednesday, with the contract shedding risk premium as the Black Sea grain export deal was extended for 60 days.
-- Corn for July delivery fell 3.4% to $5.61 1/2 a bushel.
-- Soybeans for July delivery fell 2% to $13.37 a bushel.
HIGHLIGHTS
Kick the Can Down the Road: Confirmation throughout the day of a fresh 60-day extension for the Black Sea export corridor put pressure on the CBOT grains complex, with wheat catching most of the selling. The most-active wheat contract fell after both Turkish President Tayyip Erdogan and UN Secretary General Antonio Guterres confirmed a deal had been reached allowing Ukrainian vessels carrying grains to exit the country's ports.
But in a release, Guterres said that "outstanding issues remain" between Russia and Ukraine.
Fresh Delete: China has canceled more previously announced purchases of U.S. corn exports, this time for 272,000 metric tons for delivery in the 2022-23 marketing year, says the USDA. It is the latest of a series of cancellations announced by the USDA this spring, and comes after China released weak economic data, creating concerns on commodity markets as a whole that the country's demand for raw materials will suffer.
Corn caught the brunt of the selling for most of the day.
Slice and Dice: Traders see the current environment of supportive weather for large crops and another extension of the Black Sea grain export deal as a reason to remove the risk premium seen for these futures.
"Right now there is a total absence of bullish news in corn and soybeans and the buyers know it so they are keeping their hands in their pockets now and going to a hand-to-mouth paradigm," said Sterling Smith of AgriSompo.
Smith added that while the weather appears cooperative for U.S. farmers, risk still exists of issues down the road.
INSIGHT
Looking Rough: The yield for winter wheat crops in Kansas has taken a big hit because of stubborn drought conditions seen in the state, according to scouts on a wheat tour led by the Wheat Quality Council. From 318 stops, the first day of the tour, which focused mostly on fields in the northern portion of Kansas, showed an average yield of 29.8 bushels per acre. That is down nearly 10 bushels an acre from the same time last year and well down from the USDA estimate for overall wheat crops in the 2023-24 marketing year.
The extensive drought has prompted many farmers to abandon far more fields than usual.
Record Crops: Global production of soybeans is expected to climb to a record high of 410.6 million metric tons in the 2023-24 marketing year, up 40.2 million tons from the previous year, the USDA said in a report this week. It is expected to come primarily from record soybean production in the U.S. and Brazil, with the USDA pegging U.S. production at 4.51 billion bushels, or 122.8 million tons.
Brazilian production is also expected to be a record, which along with an Argentinian crop recovered from a dry growing season previously is seen as inflating world supply.
AHEAD
-- The USDA is scheduled to release its weekly export sales report at 8:30 a.m. EDT Thursday.
-- The USDA is due to release its monthly cattle on feed report at 3 p.m. EDT Friday.
-- The USDA is scheduled to release its monthly chickens and eggs report at 3 p.m. EDT Friday.
-- The CFTC is due to release its weekly commitments of traders report at 3:30 p.m. EDT Friday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
05-17-23 1559ET
