By Kirk Maltais

--Corn for March delivery fell 4.5% to $5.00 1/2 a bushel on the Chicago Board of Trade Friday, dropping dramatically as managed money investors increased profit-taking.

--Soybeans for March delivery fell 4.3% to $13.11 3/4 a bushel.

--Wheat for March delivery fell 0.4% to $6.34 1/2 a bushel.

HIGHLIGHTS

Friday Flight: The selloff in grains accelerated Friday, with futures turning sharply lower as managed money funds closed out positions. Midday, funds sold 34,000 contracts of corn, 21,900 contracts of soybeans and 15,400 contracts of wheat, according to AgResource. "The market tried to bounce off the overnight lows on larger than expected U.S. weekly exports of summer row crops while wheat has tried to follow," said the firm. "The volume of CBOT trade has been massive with the charts turning lower amid this week's inability to rally."

Underwhelmed: Export sales of U.S. grains were stronger than traders expected, which set the market up for disappointment when grain futures didn't rebound in response. Soybean sales totaled 2.65 million metric tons for both the 2020/21 and 2021/22 marketing years, while corn sales totaled 1.48 million tons for both marketing years. Grains traders surveyed by The Wall Street Journal expected sales of soybeans to be anywhere from 800,000 tons to 1.7 million tons, and corn sales to be 600,000 tons to 1.2 million tons. "The report was viewed as supportive all around," said Terry Reilly of Futures International.

INSIGHT

Turn for the Worse: With today's deep dip, grain futures on the CBOT posted their worst week since the early days of the coronavirus pandemic in the U.S. At today's close, soybean futures have shed 7.6% since Tuesday, while corn futures dropped 5.8% and wheat futures fell 7.2%. It's a sharp turn away from the 6-to-7-year highs reached by row crops just a week ago.

Tough Road: U.S. ethanol inventories have dropped slightly this week, according to data from the EIA. In its weekly report -- delayed due to Martin Luther King Jr. Day on Monday -- the EIA said inventories fell 64,000 barrels last week to 23.63 million barrels. Meanwhile, daily production rose slightly, climbing by 4,000 barrels per day to 945,000 barrels per day. Coronavirus continues to be the main drag on ethanol usage returning to pre-pandemic levels, with overall gasoline consumption still down 9% from this time last year.

 
AHEAD

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

--The USDA will release its monthly cold storage report at 3 p.m. ET Monday.

--Railway operator Norfolk Southern will release its fourth-quarter 2020 earnings before the stock market opens Wednesday.

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

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

(END) Dow Jones Newswires

January 22, 2021 15:42 ET (20:42 GMT)

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