By Kirk Maltais
--Corn for December delivery fell 2.3% to $4.41 1/2 a bushel, on the Chicago Board of Trade on Tuesday, in reaction to a mild decline in crop conditions due to excessively wet weather.
--Wheat for September delivery fell 2.2% to $5.58 3/4 a bushel.
--Soybeans for July delivery fell 1.7% to $11.11 1/4 a bushel.
HIGHLIGHTS
Still Strong: The amount of U.S. crops in good or excellent condition fell from last week, but not as much as anticipated by traders and analysts--putting fresh pressure on CBOT grains. Monday's Crop Progress report showed the amount of corn in good or excellent condition slipping three points to 69%, soybeans down three points to 67%, and spring wheat falling five points to 71%. While these drops are seen as evidence of excessive wet weather in some growing areas, they're smaller than expected. "The market is unconcerned about flooding… and more focused on strong national crop ratings," said Doug Bergman of RCM Alternatives in a note.
Look to the Sky: Grain traders and analysts are honing in on weather patterns for the next few weeks, as flooding in northern growing states like Minnesota and Iowa is expected to make an impact on national figures for yield and production. "There are uneven weather patterns, which will bring the haves and have nots in yields," said Daniel Flynn of Price Futures Group. Friday's acreage report is unlikely to reflect the extent of damage to U.S. crops by flooding, Flynn adds, but July's WASDE--reported in the middle of next month--is seen as having weight.
INSIGHT
Mixed Messages: The CFTC's latest Commitments of Traders report showed mixed trends in how managed money is approaching grains--with traders cutting shorts and adding longs for corn through June 18, while soybeans cut longs and added over 24,000 short contracts. For the most part, wheat futures cut longs while adding new short contracts. The activity is a source of concern, said Matt Zeller of StoneX in a note. "Speculative net short builds despite ratings declines, bearish reports seen Friday," he says, referencing the USDA's upcoming Crop Acreage report due out at noon eastern time Friday.
Export Slide: Exports of grain out of Ukraine are expected to shrink in the 2024/25 marketing year, according to new estimates from SovEcon. The firm estimates in a note that Ukrainian wheat exports in 2024/25 will total 13.6 million metric tons, off 25% from this time last year. Corn exports are expected at 22 million tons, down 23%. Lower crop production is expected out of Ukraine this year, due to both drought issues and damage to farmland from its ongoing war versus Russia. SovEcon adds that lower export potential out of both Ukraine and Russia may become a source of support for prices as the year progresses.
Corn Pop: The USDA announces a new flash sale of 209,931 metric tons of corn to Mexico, with 187,833 tons sold in 2024/25 and the remainder sold in 2022/23. The notice comes amid recent hand-wringing among traders and analysts about Mexico no longer wanting to accept GMO corn--and appears to show that prices have fallen far enough to bring the usual big players back into the fold. The USDA confirmed a flash sale of soybean meal to China yesterday. Corn and soybeans have both been under pressure due to the perception that there's plenty of room to grow bountiful crops, and only some weather adversity to derail the higher estimates so far.
AHEAD
--The EIA will release its weekly ethanol production and stocks report at 10:30 a.m. ET Wednesday.
--The USDA will release its weekly export sales report at 8:30 a.m. ET Thursday.
--The USDA will release its quarterly Hogs and Pigs report at 3 p.m. ET Thursday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
06-25-24 1524ET
