By Kirk Maltais
--Wheat for December delivery fell 1.5% to $5.99 3/4 a bushel, on the Chicago Board of Trade on Thursday, with traders cautious amid a mixed bag of expectations for next week's WASDE report.
--Soybeans for November delivery fell 1.2% to $13.59 1/2 a bushel.
--Corn for December delivery rose 0.1% to $4.86 1/4 a bushel.
HIGHLIGHTS
Running the Gamut: Next week's WASDE report from the USDA was on the forefront of trader's minds today, amid mixed predictions of what the report may say. StoneX forecasts national corn yields at 175 bushels an acre with a production of 15.102 billion bushels, and soybeans at 50.1 bushels an acre with an output of 4.144 billion bushels. These figures are lower than the USDA's estimates released in August, but other analysts foresee a steeper drop, with Allendale Inc. forecasting corn production at 14.805 billion bushels with 171.5 bushels an acre, and soybeans at 4.1 billion bushels with 49.6 bushels an acre. The spread in estimates kept traders cautious in today's session.
Export Questions: The general consensus among analysts and traders is that export demand is soft - which put pressure on grain futures as a whole. The strengthening U.S. dollar is not helping the competitiveness of grain exports, but analysts surveyed by The Wall Street Journal this week are forecasting soybean sales through Aug. 31 to more than double from the previous week, which is owed to the streak of flash sales to "unknown destinations" reported by the USDA late last month. The designator "unknown destinations" could mean any country, but grain traders and analysts often assume it to mean that China is the buyer.
INSIGHT
Bad Timing: Hot and dry weather could crimp the upcoming harvests of some crops. The U.S. Drought Monitor reports that dryness is worsening in Minnesota, Iowa and Wisconsin with areas of severe, extreme and exceptional drought spreading. Extreme and exceptional drought is also spreading in East Texas and Louisiana. Harvesting introduces a surge of grains into domestic and export markets, but unrelenting heat could put a damper on that flow. "The variable is whether the crop is larger or smaller than expected," said Ira Epstein of Linn & Associates in a note. "Early harvest results can be misleading, in terms of overall size and quality."
Taking a Chunk: The bottom line for farmers is being hit by prices being off from highs established earlier in the year, along with stubbornly high input costs. "Several contacts noted that while commodity prices were still favorable, they were retreating to levels that could be below break-even for some producers given high input costs," said the Federal Reserve Bank of Minneapolis in its report in this week's Beige Book.
Edging Higher: Average ethanol production in the U.S., along with total inventories, inched higher through the week ended September 1, said the EIA. Ethanol inventories totaled 21.62 million barrels for the week, which is up by a paltry 12,000 barrels from last week. Meanwhile, average daily ethanol production rose to 1.012 million barrels a day, only 5,000 barrels a day higher than last week's figures. Analysts surveyed by Dow Jones this week were expecting much bigger moves.
AHEAD
--The USDA will release its weekly export sales report at 8:30 a.m. ET Friday.
--The CFTC will release its weekly Commitment of Traders report at 3:30 p.m. ET Friday.
--The USDA will release its weekly grains export inspections report at 11 a.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
09-07-23 1545ET
