By Kirk Maltais

--Wheat for May delivery rose 6.6%, to $12.09 a bushel, on the Chicago Board of Trade on Friday, closing limit-up for the fourth-straight trading session as traders head into the weekend and the Russian offensive in Ukraine continues.

--Corn for May delivery rose 0.9%, to $7.54 1/4 a bushel.

--Soybeans for May delivery fell 0.4%, to $16.60 1/2 a bushel.

HIGHLIGHTS

Closing In: Wheat futures trading on the CBOT closed again limit-up, putting them now above $12 per bushel, at $12.09 per bushel--closing in on the record-high for wheat at $12.83 per bushel on the continuous contract reached March 2008. "There is no end in sight to the upswing because 30% of the world's wheat exports have been cut off from the global market by the war in Ukraine," said Commerzbank. "That said, there are indications that the high prices are beginning to put the brakes on demand." Some nations are starting to cut back on their export purchasing due to the high prices, Commerzbank added.

Lagging Behind: Soybean futures have been lagging the massive gains seen in both corn and wheat due to the fighting in Ukraine. While soybeans are less exposed to trade in Russia and the Ukraine they still face upward pressure from weather developments in South America. "The crop losses in South American remain the most important factor for the soybean market and there is an expectation that the crop problems in South America will bring more export demand to the U.S.," said Tomm Pfitzenmaier of Summit Commodity Brokerage. "If the South American crop is really as small as some analysts are predicting, then the U.S. carryout could potentially be pulled down to pipeline levels and that could prompt a test of the 2012 high at $18.00 [per bushel]."

Handle With Care: Grain traders treaded cautiously in today's session, with traders unsure of what developments in the Russia-Ukraine war the weekend will bring. "Russia vs Ukraine continues into the end of the week and will make for another nervous weekend for traders of all asset classes," said Arlan Suderman of StoneX. Mr. Suderman adds that additional volatility is expected ahead for grain futures, even if the war calms down over the weekend. "Even if the war were to settle down in the coming days, the grain bears have another hurdle to clear in next week's USDA March S&D Report," he said.

INSIGHTS

Productivity Question: U.S. crop acreage is not expected to wildly vary from previous years--despite some forecasts from private analysts that soybean acres may exceed corn. Even so, grain traders are starting to focus more on what higher input costs may mean for crop yields. "The question is if farmers will cut back on inputs once the crop is seeded," said Karl Setzer of AgriVisor. "It is not out of the question that farmers may use higher fertilizer use on high producing corn acres and scale back use on others. If this happens the 181 bushel per acre corn yield forecast will become suspect." The USDA will release its next WASDE report on Wednesday, which may provide more clarity about what this year's crops may look like.

Sliding Stocks: Stockpiles of grains in the U.S. are expected to decline in next week's WASDE report, according to analysts surveyed by The Wall Street Journal. The biggest drop is expected for corn, with stocks expected to total 1.48 billion bushels, down from 1.54 billion bushels forecast in February. Soybean stocks are expected to drop to 270 million bushels, down from 325 million bushels forecast last month, and wheat stocks are expected to total 633 million bushels, versus 648 million bushels reported in February. World stocks are also expected to drop--particularly soybeans, which are expected to fall from 92.8 million metric tons reported in February to 88.9 million tons in this month's report.

South American Slump: Analysts surveyed by the Journal are forecasting a drop in corn and soybean production from previous estimates. Analysts surveyed are forecasting corn production in Brazil to be 112.9 million metric tons, down from 114 million tons projected last month. Soybeans are expected to be at 128.2 million tons, down from 134 million tons forecast in February. Argentine production is also expected to drop--to 52 million tons from 54 million tons previously forecast for corn in February and to 42.9 million tons from 45 million tons for soybeans.

AHEAD:

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

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

--The USDA will release its monthly world supply and demand report at noon eastern time.

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

(END) Dow Jones Newswires

March 04, 2022 15:16 ET (20:16 GMT)