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Grain futures slide on USDA report, selling going into long weekend

U.S. grain futures were lower Friday after a government report released a day earlier showed supplies for key crops are more than ample, adding to the selling pressure going into the long Fourth of July weekend.

"A lot of people don't want to go home long in any of the markets, especially with the holiday weekend like this where make it or break it rains are coming this weekend," said Terry Reilly, analyst at Futures International in Chicago. "The unpredictability in the weather will send a lot of traders to go home with a zero position."

On the Chicago Board of Trade, the wheat contract for September delivery fell 3.6 percent, settling down 16.25 cents at $4.3025 a bushel. For the week, wheat was down about 7.5 percent.

Chicago's December oats contract fell 6.75 cents, or 3.4 percent, to settle at $1.9275 a bushel; corn for December was down 4 cents, or 1 percent, to settle at $3.670 a bushel; and soybeans for November slipped 16 cents, or 1.4 percent, to $11.3750 a bushel. The November soybeans contract still was up 5 percent for the full week and remains up nearly 30 percent year-to-date.

"The volume was a little choppy Friday because a lot of people were already on holiday," Reilly said.

Meantime, two U.S. Department of Agriculture reports released Thursday, Grain Stocks and Planned Acreage, were mostly seen as negative for crop prices.

"The acreage for corn, which folks out there thought was going to be cut, was actually increased, suggesting that the supply of corn for the coming season is more than ample," said Michael Shlisky, who covers agriculture for Seaport Global Securities in New York. "On the soybean side, perhaps it's more near-term inventories that exceeded expectations."

Estimates for corn and wheat in the Planted Acreage report came in higher than industry analysts' consensus, while soybean acreage in the government report was slightly below some expectations. For corn, analysts were generally looking for a 700,000-acre haircut, but the quarterly report came in with a 500,000-acre increase.

USDA's Grain Stocks report, covering domestic inventories stored as of June 1, showed estimates for both corn and soybeans were above expectations. As of June 1, old crop oats stored were 6 percent above the stocks a year ago — and the government said total stocks on hand were 21 percent above year-earlier levels.

USDA said corn planted for 2016 was estimated at 94.1 million acres, up 7 percent from last year and the third highest planting acreage in the U.S. since 1944. The area harvested for grain was estimated up 7 percent from the prior year levels and the represented the third-highest area harvested for grain since 1933.

Soybean planted acreage for the current year was seen at a record high 83.7 million acres, meaning it would be up 1 percent from last year. The area for harvest was also up 1 percent from 2015, and the government said that meant it would be a record high if realized.

The next big ag report that analysts see moving the grain markets is USDA's World Agricultural Supply and Demand Estimates report, scheduled for release on July 12.

Elsewhere, August feeder cattle futures fell 1.4 percent and the August live cattle contract declined 1.6 percent. USDA figures show cattle on feed as of June 1 were up slightly more than 2 percent from year-ago levels.