By Kirk Maltais


--Corn for December delivery rose 1.3% to $4.03 1/4 a bushel on the Chicago Board of Trade on Friday, peeking back over the $4-a-bushel threshold as traders sought to cash in on short positions ahead of the weekend.

--Wheat for September delivery rose 1.3% to $5.39 a bushel.

--Soybeans for November delivery rose 1.1% to $10.27 1/4 a bushel.


HIGHLIGHTS


Covering Their Tracks: CBOT grains hit multi-year lows through July, leaving some traders and analysts motivated to spark a short-covering rally to lock in some of their gains. "The trade has been factoring in a large U.S. crop, but the hope has been that demand would improve enough to offset the larger crop size," said Tomm Pfitzenmaier of Summit Commodity Brokerage in a note Friday morning. Recent notices of flash sales to China, along with a record-high ethanol-production rate confirmed by the EIA this week, support hopes of higher demand.

Back on the Market: Most-active CBOT soybeans led gains for row crops for part of Friday, with the USDA confirming more flash export sales to China. The USDA said in a notice that 202,000 metric tons of soybeans were sold to China for delivery in the 2024/25 marketing year. This, on top of another sale Thursday, had traders and analysts hopeful of higher demand for U.S. grains going forward. "Beans are catching a bid this morning with some signs that prices may have gotten cheap enough to spark export demand," said Doug Bergman of RCM Alternatives in a note. "China is way behind on purchases, which is expected to be a supporting factor moving forward."


INSIGHT


Size Matters: Many analysts and traders are convinced that the USDA will raise its yield outlook for corn in its next WASDE report on Aug. 12, leaving the debate centered on the amount it may increase the forecast. Many analysts are forecasting yields to grow to as much as 185 bushels an acre from 181 bushels an acre currently, but StoneX's estimated place yields at a modest 182.3 bushels an acre. If the USDA opts for a smaller uptick like that, then CBOT futures may see a big swing higher, said Daniel Flynn of Price Futures Group in a note.

Weaker on the Demand Side: Beyond the headline numbers in Friday's July jobs report, a slowdown on wage increases is also relevant, DWS's George Catrambone said. In addition to reporting slowing payroll growth and rising unemployment, the Department of Labor also said 12-month average hourly earnings growth slowed to 3.6% from 3.9%. The wage data "does point to a slowing down and a weakening economy," Catrambone said. Higher recession fears may be an issue for both grains and livestock markets if consumers curb spending on nonessential fuel and food.


AHEAD


--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.

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

--The USDA will release its weekly export sales report at 8:30 a.m. ET Thursday.


Paulo Trevisani contributed to this article.

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


(END) Dow Jones Newswires

08-02-24 1542ET