By Paulo Trevisani


--Corn for December delivery fell 1% to $4.00 3/4 a bushel on the Chicago Board of Trade amid forecasts of good weather for U.S. crops.

--Wheat for September delivery fell 0.9% to $5.38 1/4 a bushel.

--Soybeans for September delivery fell 0.8% to $10.18 3/4 a bushel.


HIGHLIGHTS


Broad Decline: Corn led a broad decline in the grains complex after the U.S. energy agency reported a weekly decline in ethanol production. Futures were already weak amid favorable weather for crops. "Now the question is if the USDA on Monday's report, will lower harvested acres (prevent plant) to offset higher yield?" Total Farm's Naomi Blohm said in a note. Corn for December delivery "needs to hold $4.00 support - or next downside target is $3.75, then $3.50," she says. "It all comes down to carryout perception on Monday's report."

Ethanol Production: Corn for December briefly breached the $4 floor before recovering to settle only slightly above that mark. The EIA said that average ethanol production was 1.07 million barrels a day last week, down from a record-setting 1.11 million barrels a day a week earlier. AgResource said in a report that U.S. corn yields are forecast between 182 and 183 bushels per acre and 52.5 bpa for soy. "An export demand story looms in corn," AgResource said.


INSIGHT


Currency Help: Brazilian farmers look to take advantage of a weaker real to move soybeans as they unload the last of the previous harvest and start selling the next crop, Arlan Suderman of StoneX said in a note. "The Brazilian farmer still possesses roughly a fifth of last year's crop, while he's also beginning to sell the next crop that he'll start planting next month." In StoneX's Brazil survey, farmers said they expect to grow 165 million metric tons of soybeans in the coming season, up 10% from the previous crop. In the U.S., sales in preparation for what's expected to be a big harvest is focused more on corn, as most farmers have already moved their soybeans, Suderman added.

China's Pick: "Either corn is too cheap, or wheat is too expensive, but it's doubtful that wheat/corn spread needs to push too much higher," AgResource said in a report. Corn closed at $4 a bushel and wheat is $5.38. The firm adds that Brazil's corn exports were down 16% to 3.5 million tons in July. "The difficult question is that China will need to import at least 23-25" million metric tons of corn and remains to be seen where they will source it.


AHEAD


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

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


Anthony Harrup contributed in this article.


Write to Paulo Trevisani at paulo.trevisani@wsj.com; @ptrevisani


(END) Dow Jones Newswires

08-07-24 1536ET