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Wheat Drops as Traders Take Profit Ahead of Holiday

05/28/2021 | 03:11pm EDT

By Kirk Maltais

--Wheat for July delivery fell 1.9%, to $6.64 1/4 a bushel, on the Chicago Board of Trade on Friday, with fund traders opting to take advantage of yesterday's big jumps in futures by selling off ahead of the Memorial Day holiday weekend.

--Corn for July delivery fell 1.3%, to $6.56 1/2 a bushel.

--Soybeans for July delivery fell 0.5%, to $15.32 a bushel.


Playing it Safe: Profit-taking in grains futures paced them lower in trading Friday. "The CBOT ends the week with sort of a stalemate with the bulls banking profits while the bears do not want to press their luck following the failed break that occurred midweek," said AgResource. According to the firm, fund traders sold 3,500-4,000 contracts of corn, 3,200-3,800 contracts of soybeans, and 2,900-3,200 contracts of wheat today. The CBOT is closed in observance of Memorial Day on Monday, reopening on Tuesday.

Cool and Wet: Cool temperatures and more rainfall are expected for U.S. crop-growing areas over the holiday weekend, said DTN. The lower temperatures may create frost risks in the northern plains, according to the firm. "Crop progress is likely to be a little slower because of it and there could be some isolated frost damage as well," said DTN. "Temperatures should then go on a rising trend next week." In many areas, the rain will be welcome for crops, supporting better condition.


Keeping the Focus: Weather has been a prime factor moving grains futures around, something that looks to continue, said Karl Setzer of AgriVisor. "While subsoil moisture is adequate the longer we see limited rainfall the more likely these will start to be depleted as well," said Mr. Setzer. "Given tight new crop ending stocks estimates we will see more attention on weather outlooks all growing season, along with a likely higher volume of risk premium." The shift from planting to growing will highlight the importance of weather and rainfall in the coming weeks.

Spring Squeeze: While wheat led futures down today, there's indications that globally, spring wheat production may be down this year--tightening supply for the crop. Today, Black Sea research firm SovEcon cut its 2021 Russian wheat crop forecast from 81.7 million metric tons to 80.9 million tons, adding that the outlook for spring crop in Russia is the big open question for world supply. "Everyone knows that the eastern spring wheat areas, especially in Siberia, have been dry, and now the Russians find themselves in a similar boat to the Americans, wheat-wise," said Charlie Sernatinger of ED&F Man Capital. "Which is to say, their winter crop has been getting plenty of moisture, while the spring wheat areas have not."


--The Chicago Board of Trade is closed in observance of Memorial Day on Monday, with trading resuming on Tuesday.

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

--The USDA will release its monthly grains crushings report at 3 p.m. ET Tuesday.

--The USDA will release its weekly crop progress report at 4 p.m. ET Tuesday.

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

(END) Dow Jones Newswires

05-28-21 1510ET

Stocks mentioned in the article
ChangeLast1st jan.
CORN FUTURES (C) - CBR (FLOOR)/C1 0.09% 549.25 End-of-day quote.13.38%
DJ INDUSTRIAL 0.50% 35105.69 Delayed Quote.14.55%
S&P GSCI CORN INDEX 1.78% 460.0619 Delayed Quote.12.96%
S&P GSCI SOY BEANS INDEX 0.64% 547.2946 Delayed Quote.3.81%
SOYBEAN MEAL FUTURES (ZM) - CBE (ELECTRONIC)/C1 -0.78% 356 End-of-day quote.-17.40%
US DOLLAR / RUSSIAN ROUBLE (USD/RUB) -0.48% 73.077 Delayed Quote.-0.12%
WHEAT FUTURES (W) - CBR (FLOOR)/C1 2.11% 688.75 End-of-day quote.7.53%
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