By Dan Molinski


--Wheat's most-active contract that expires in March fell 3.9%, to $7.45 1/2 a bushel on the Chicago Board of Trade on Wednesday, driven largely by falling prices in European markets and healthy domestic crops.

--Soybeans' March contract declined 0.6% to $14.83 1/2 a bushel.

--Corn for March fell 2.5% to $6.53 1/2 a bushel.


HIGHLIGHTS


Europe Stumbles: "Cereals have started the year in decline on Euronext, with operators expressing their fears concerning the competitiveness of Black Sea origins," says Agritel in a research note. "EU exports of soft wheat stood at 16.71 Mt on 1 January, up 6% compared to the previous campaign, at 15.79 Mt. France is the leading European exporter with 6.83 Mt, followed by Romania with 1.96 Mt and Germany with 1.88 Mt."

Russian Rivalry: Some of wheat's downward pressure is also coming from an onslaught of foreign competitors at a time when demand may be weakening as the Federal Reserve pursues higher interest rates to cool down the economy. Terry Reilly at Futures International attributes wheat's price-declines this week to "ongoing Russia competition and strong December Western Australia wheat exports. Three import tenders were announced overnight."

U.S. Crops Healthy: Beyond the bearish knock-on effects from Europe's lower prices, U.S. grains markets are also facing downward price pressure because many regions' crops are doing quite well, meaning supplies aren't a concern, Agritel added. It said that while Kansas wheat crops are struggling a bit compared to late November, "the decline in Kansas crop rating is offset by significant improvements in other regions, such as Colorado."


INSIGHT


Pressure-Cooked Corn: "Corn started the year under pressure," said Doug Bergman at RCM Alternatives in an early-morning note that correctly predicted more follow-through to the downside in today's trading action, as the market corrected from overbought conditions. Bergman did say, however, that buyers may be waiting to jump back in before long.


AHEAD


--Conagra Brands Inc. will release its second-quarter 2023 earnings report at 7:30 a.m. ET Thursday.

--The EIA will release its weekly ethanol production and stocks report at 11 a.m. ET Thursday.

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

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


Write to Dan Molinski at dan.molinski@wsj.com


(END) Dow Jones Newswires

01-04-23 1525ET