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Corn Plunges as Funds Pull Back from Ag Commodities — Daily Grain Highlights

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By Kirk Maltais

— Corn for December delivery fell 5.5% to $6.55 1/2 a bushel on the Chicago Board of Trade Thursday, with fund traders pulling back from their sizable long positions in grains amid speculation of an economic recession.

— Wheat for September delivery fell 4% to $9.49 1/4 a bushel.

— Soybeans for July delivery fell 3.6% to $15.93 1/4 a bushel.

HIGHLIGHTS

Hands-Off Approach: Grain futures on the CBOT dropped hard ahead of the end of the month and quarter.

“CBOT grain futures are sharply lower on continued risk-off selling in a waterfall weekly price decline,” said AgResource in a note, adding that higher interest rates seen globally this month are contributing to end-of-month selling. “Fundamentally it is difficult to justify the severity of the break with the 2022 growing season for summer row crops having yet to push through their most sensitive stage of development.”

Backtracking: The close of grain futures Thursday put the most-active corn and wheat contracts at their lowest close since late February, before the fighting in Ukraine sent futures soaring.

Overlapping factors contributed to Thursday’s weakness, Dan Hueber of the Hueber Report told WSJ. “I believe it is a combination of lack of any significant weather issues, general commodity liquidation over fears of slowing economies and that we are approaching the end of a month and a quarter,” he said.

INSIGHTS

Loosening Up: The USDA is working with more ports to help ease congestion clogging shipping channels for U.S. grains, with the agency stating that it is now working in Tacoma, Wash., and Houston to help “ensure agricultural companies and cooperatives can export their commodities.” At these sites, the USDA says it will provide payments for dry or refrigerated containers to be used as temporary storage. The USDA had previously announced similar efforts at the ports of Oakland and Seattle.

In its weekly Grain Transportation Report, the USDA said that grain shipments via rail, barge and oceangoing vessel are all down from the same time period last year.

Expected an Uptick: U.S. corn exports are expected to turn higher in this week’s report from the USDA, according to grain traders surveyed by The Wall Street Journal.

Corn export sales are expected to total anywhere from 550,000 metric tons to 1.05 million tons, versus 279,800 tons reported last week.

Meanwhile, soybean sales are expected to turn lower from last week’s figure, with estimates ranging from 250,000 tons to 650,000 tons.

Wheat sales are expected to total 250,000 tons to 400,000 tons, which would be an increase from 236,900 tons last week.

Data Delay: The weekly release of daily ethanol production data, as well as U.S. ethanol inventories, has been delayed, according to the EIA. The EIA said Wednesday that problems with its systems forced the delay of its petroleum data, although Thursday the EIA was able to release natural-gas storage statistics. Because of the Juneteenth holiday, the data were scheduled to be released at 10:30 a.m. EDT Thursday.

Thursday’s report would have helped provide traders with insight as to if gas/ethanol demand had been sustained despite high gas prices, said Tomm Pfitzenmaier of Summit Commodity Brokerage in a note this morning.

AHEAD

— The USDA is scheduled to release its weekly export sales report at 8:30 a.m. EDT Friday.

— The USDA is due to release its monthly Cattle on Feed Report at 3 p.m. EDT Friday.

— The CFTC is scheduled 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

06-23-22 1605ET

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