By Kirk Maltais

 

-- Soybeans for July delivery rose 5% to $13.96 a bushel on the Chicago Board of Trade Friday, with traders taking Thursday's steep drop as an opportunity to buy back into futures.

-- Wheat for July delivery rose 3.7% to 6.62 3/4 a bushel.

-- Corn for July delivery rose 3.5% to $6.55 1/4 a bushel.

 

HIGHLIGHTS

 

Oversold: Selling seen in grains Thursday appears to have been overdone, with wet weather seen as not being enough to alleviate dryness issues in certain growing areas.

"This week's hot/dry weather has really battered Western, Midwest and Northern Plains crops according to producer sources with yield potential to fall off the table unless immediate soaking rainfall arrives," said AgResource. "By soaking rainfall, we mean 2-4 inches, not the dust settling rains that 20% of Iowa has received in recent days."

Weather models showing increased rainfall across growing areas were a pressure point for grains in trading Thursday, along with macroeconomic worries.

 

Buyers Back In: "Thursday's collapse was bound to attract some buying, but there was fundamental support as well," said Arlan Suderman of StoneX.

For many traders, Thursday's selling was seen as disproportionate to macro conditions and rainfall hitting some growing areas, albeit not all.

 

INSIGHTS

 

Sign of the Times: Thursday's big selloff is "a sign of things to come," according to Capital Economics.

"The scale of this week's fall in commodity prices is ... consistent with our assessment that much of the rally over the last year or so has been led by investor speculation as opposed to a genuine improvement in the underlying fundamentals," the firm said Friday.

Slowdowns in China's economy are expected to further impact metals prices, while in agriculture, decent weather in the U.S. supports stronger-than-expected crop production.

"We think that higher U.S. production and subdued global consumption growth will help to tip the global market into a surplus in 2021/22," Capital Economics said.

 

Piqued Interest: Lower prices for U.S. grain futures are expected to bring China back to purchasing more U.S. grain exports, said Daniel Flynn of the Price Futures Group. Underlying fundamentals make grain traders think that a sustained turnaround could be in the cards, he added.

"We have a weak carryover market and if the weather forecasts continue to change, reality will come into place," he said. "It is not what you plant but what you grow."

 

AHEAD

 

-- The USDA is scheduled to release its weekly export inspections report at 11 a.m. EDT Monday.

-- The CFTC is due to release its weekly commitments of traders report at 3:30 p.m. EDT Monday. The report was scheduled for Friday, but was delayed because of observance of the Juneteenth federal holiday.

-- The USDA is scheduled to release its weekly crop progress report at 4 p.m. EDT Monday.

-- The USDA is due to release its monthly cold storage report at 3 p.m. EDT Tuesday.

 

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

 

(END) Dow Jones Newswires

June 18, 2021 15:34 ET (19:34 GMT)

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