By Kirk Maltais

 

--Corn for July delivery rose 1.2% to $6.99 a bushel, on the Chicago Board of Trade Thursday, in reaction to the USDA forecasting higher corn consumption in its latest monthly supply and demand report.

--Wheat for July delivery fell 0.2% to $6.83 3/4 a bushel.

--Soybeans for July delivery fell 1.2% to $15.44 a bushel.

 

HIGHLIGHTS

 

Coveted Corn: The USDA says that it expects usage of U.S. corn to grow from previous projections, amid higher expectations for consumption by the world export market as well as the domestic ethanol market. "Beginning stocks are down 150 million bushels reflecting projected increases for 2020/21 in corn used for ethanol and exports," the USDA said in today's WASDE report. "Corn used for ethanol is raised 75 million bushels based on the most recent data from the Grain Crushings and Co-Products Production report, and weekly ethanol production and refiner and blender net inputs data during May which indicate demand is almost back to levels seen prior to Covid-19." Meanwhile, the USDA opted to leave its production forecasts for 2021/22 unchanged.

WASDE'S Wake: On the supply side for world corn, weather difficulties in South America appear to be a factor spurring some trader excitement post-WASDE report. "We now see a tighter situation in the corn from South America and a much more ample supply building in the soy. The market has reacted as such," said Michael Zuzolo of Global Commodity Analytics. According to the USDA's latest estimates, Brazilian corn production is expected to fall from last month's projections, to 98.5 million metric tons.

Stocked Up: After the WASDE's release Thursday, the most-active soybean contract fell in reaction to higher ending stocks domestically and globally for soybeans, said Terry Reilly of Futures International. According to the USDA, 2021/22 soybean ending inventories are expected to rise to 155 million bushels, up from forecasts from analysts surveyed by The Wall Street Journal of 139 million bushels. Meanwhile, world stocks are expected to rise to 92.55 million metric tons in 2021/22, up from forecasts of 91.6 million tons by analysts.

 

INSIGHTS

 

All About The Weather: Although CBOT grains futures are being moved by the new forecasts released by the USDA, it's expected to quickly dissipate, said Craig Turner of Daniels Trading. "I don't see any limit moves today after this report or a change in trend," said Mr. Turner. "The market will reprice the CBOT according to the ending stocks and stock/usage ratios and then we go back to trading the weather tonight." Cooler temperatures and isolated rainfall is seen moving into U.S. crop-growing areas, according to DTN.

Healthy Crop Ahead: Spring wheat growing in Ukraine - which along with Russia is the leading area for wheat sold into the world export market - looks to be in for weather that's supportive for a healthy crop, said Marex Spectron. Rainfall and mild temperatures are forecast there for the next 10 days, and rainfall in prior weeks has been healthy, according to the firm. "The current environmental conditions suggest that we will see improved wheat yields in Ukraine for 2021/22, but there is the possibility that drier weather conditions during the time of planting and the forecast for drier and warmer weather for the start of July could have a slight impact on yields," said Marex Spectron.

Export Erosion: Export sales of U.S. corn were reported this week much lower than forecast by grain traders surveyed by The Wall Street Journal. Across the 2020/21 and 2021/22 marketing years, corn sales totaled 216,000 metric tons, the USDA reported in its weekly export sales report Thursday. This total is well below expectations, with traders looking for anywhere between 400,000 tons and 1 million tons. Japan was a leading buyer of U.S. corn this week, purchasing 203,700 tons of 2020/21 corn - with 199,900 tons switched from being previously designated as sold to unknown destinations by the USDA.

 
AHEAD 
 

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

--The USDA will release its weekly 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

June 10, 2021 15:29 ET (19:29 GMT)

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