By Kirk Maltais

--Wheat for July delivery fell 2.6%, to $11.68 3/4 a bushel, on the Chicago Board of Trade on Friday, with fund traders putting pressure on agricultural futures amid a largely down day across markets.

--Corn for July delivery fell 0.6%, to $7.78 3/4 a bushel.

--Soybeans for July delivery rose 0.9%, to $17.05 1/4 a bushel.

HIGHLIGHTS

Heading for the Exits: Larger funds were seen as the main source of pressure for selling of grains futures today. "The managed money flow in and out of the markets remains as much of a factor in price discovery at the present time as any other factor, including the U.S. planting reports," said Karl Setzer of AgriVisor in a note. Setzer adds that the inclusion of these traders is adding volatility to grain futures. "The concern with this market involvement is that if it exits it can cause a correction regardless of fundamentals." Wheat led the way, correcting after climbing earlier this week on news of India banning exports.

Hit the Gas: Expectations for improved planting progress being shown in next week's Crop Progress report from the USDA was a weight on the corn contract today. "Corn is set to finish the week under pressure as crop progress is expected to show national corn planting progress caught up with no widespread weather issues beyond the wet spots across North Dakota and Northern Minnesota," said Doug Bergman in a note. Last week, the USDA said 49% of U.S. corn has been planted, versus the 5-year average of 67%.

Bustling Demand: Changing sentiment of grain traders regarding soybeans is supporting futures today, while corn and wheat futures fell amid fund liquidation. "[Traders are] watching demand for old-crop soybeans ratchet up, drawing stocks tighter ahead of this year's harvest," said Arlan Suderman of StoneX in a note. Over the past 10 days, most-active soybean futures are on the rise--climbing 7.3% in that time period. Yesterday, the USDA reported stronger-than-expected sales for old-crop soybeans, particularly to China.

INSIGHTS

Becoming More Attractive: Although trading today largely showed a mitigation of risk among large funds, the move of equity markets close to bear market territory may ultimately fuel money back into grain futures, said AgResource in a note. "Grain, oilseed and energy markets in recent weeks have performed well as hedges against inflation and future economic uncertainty," said the firm. Fund liquidations seen today is not expected to be a lasting trend.

Changing Timetable: How long grain futures may remain close to their record highs may have extended through the summer, according to Fitch Solutions in a note. "We have significantly increased our price forecasts for corn and soybean due to a major shift in market fundamentals over February-April," said the firm. "Grain prices will remain elevated in Q222 as the factors that drove prices higher in Q122 remain in place, namely disrupted exports from Russia and Ukraine and high fertilizer costs." However, futures in general are expected to slide back to more normal levels by the start of 2023.

AHEAD:

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

--The USDA will release its monthly Cold Storage report at 3 p.m. ET Monday.

--The USDA will release its weekly crop progress report at 4 p.m. ET Monday.

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

(END) Dow Jones Newswires

May 20, 2022 15:10 ET (19:10 GMT)

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