By Kirk Maltais

 

--Wheat for March delivery fell 0.5%, to $7.57 a bushel on the Chicago Board of Trade Friday in response to tough competition from cheap and plentiful wheat exports from Russia.

--Soybeans for March delivery fell 0.2% to $15.32 a bushel.

--Corn for March delivery rose 0.3% to $7.60 a bushel.

 

HIGHLIGHTS

 

Cheap Cut: Pressure from cheap prices for Russian exports weighed down CBOT wheat futures Friday - particularly confirmation that Egyptian buyers purchased Russian wheat at a price of roughly $322 per metric ton, reported to be the cheapest offer. "Russia has a large production and is undercutting most world prices in the international market," said Jack Scoville of Price Futures Group in a note. "The demand for U.S. wheat in international markets has been a disappointment all year and has been hindered by low prices and aggressive offers from Russia."

Getting Better: The Buenos Aires Grains Exchange reported this week that Argentina's soybean crop conditions improved, with the portion of the crop that's in good or excellent condition rising five percentage points from the previous week to 12%, while corn quality climbed 10 percentage points to 22%. DTN forecasts that Argentina crops are expected to stay dry over the next 10 days, this while temperatures climb. The improved crop conditions were a source of pressure for soybeans today.

 

INSIGHT

 

Strained Relations: The alleged Chinese spy balloon found floating over Montana has grain traders worried about the fallout in diplomatic relations between China and the U.S. "The Chinese surveillance balloon deepens the deteriorating US/China relationship, which could adversely impact ag trade," said AgResource in a note. In recent years, the strain between the U.S. and China has resulted in increased scrutiny over China's appetite for U.S. grain exports, particularly soybeans, and its importance to the U.S. ag economy.

Focal Point: Next week's WASDE report from the USDA is being eyed by grain traders as a source of clarity for how the South American crop situation is shaping up. "Grain and oilseed traders still have concerns about drought-shortened corn and soybean crops in Argentina, and harvest delays in Brazil," said Arlan Suderman of StoneX in a note. Analysts surveyed by The Wall Street Journal are forecasting a 4 million metric ton drop in both Argentine corn and soybean output. However, traders are predicting that the WASDE will show slightly higher corn and soybean production from Brazil.

Releasing Pressure: Food prices have fallen for the tenth month in a row, as higher exports of wheat from Russia and Australia ease inflationary pressures, a report published Friday by the Food and Agriculture Organization of the United Nations said. The FAO's food-price index, a closely watched barometer of global food prices, averaged 131.2 points in January 2023, down 1.1 points or 0.8% from December's reading. Prices are now down 17.9% from the peak in March, when the index hit an all-time high of 159.7 points following Russia's invasion of Ukraine.

 

AHEAD

 

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

-Green Plains Inc. will release its fourth-quarter earnings report at 6:30 a.m. ET Wednesday.

-Ingredion Inc. will release its fourth-quarter earnings report before the stock market opens on Wednesday.

-Bunge Ltd. will release its fourth-quarter earnings report before the stock market opens on Wednesday.

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

-The USDA will release its monthly world supply-and-demand report at noon ET Wednesday.

 

Yusuf Khan contributed to this article

 

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

 

(END) Dow Jones Newswires

February 03, 2023 15:46 ET (20:46 GMT)

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