By Kirk Maltais


--Corn for December delivery rose 2.6% to $5.06 1/2 a bushel on the Chicago Board of Trade on Thursday amid the threat of low soil moisture in corn crop-growing areas during a key pollination phase.

--Soybeans for November delivery fell 1.1% to $13.39 1/2 a bushel.

--Wheat for September delivery fell 2.4% to $6.58 a bushel.


HIGHLIGHTS


Lingering Worries: Recent rainfall has eased some fears that dry soil in crop-growing areas will stifle yields, but traders continue to have concerns that the soil moisture isn't enough, particularly for corn. "Subsoil moisture is still an immediate threat," said Daniel Flynn of Price Futures Group in a note. "Average yields could be reached with regular rains and cooler temps for the remainder of the growing season. However, the minimal soil moisture leaves crops vulnerable to any heat and dryness in the coming weeks."

Condition Change: Drought conditions in the Eastern Corn Belt improved for the week ended July 4 in Illinois and Indiana, according to the U.S. Drought Monitor. However, high temperatures and drought will likely continue to be a pressure point for grains going forward. "[We] look for choppy trade heading into the weekend as traders gauge how much improvement there will be in U.S. corn, soybean and spring wheat crop conditions," AgResource said in a note.

Drivetime: Production of U.S. ethanol rose in the week ended June 30, finding a six-month high according to the latest weekly report from the EIA. Average production was 1.06 million barrels a day, up from 1.052 million barrels a day in the previous week and topping forecasts by analysts surveyed by Dow Jones. Ethanol stocks fell by roughly 700,000 barrels from the previous week, finding a low last seen in November. The drop-off in stocks was more than expected by analysts.


INSIGHT


Hostile Force: Traders are watching for ramped-up activity in the Russia-Ukraine war, potentially causing more damage to Ukrainian farmland, with special emphasis on the Zaporizhzhia nuclear power plant. "Regardless of the instigator, any kinetic activity at the plant will cause major concerns regarding future grain production in the area and a possible halt to the grain corridor agreement which is due to expire July 18," said Brian Splitt of AgMarket.net. "With less than two weeks left in the current agreement, we are likely to be very sensitive to headlines until we know the outcome."

Light Expectations: Analysts surveyed by The Wall Street Journal are forecasting another down week for U.S. grain export sales, with only light new sales expected. Analysts see Friday's report as potentially showing a drop-off across the board, which would be a continuation of the middling figures reported last week. For the week ended June 29, the only major flash sale reported was one to Mexico for 149,000 metric tons of corn in the 2023/24 marketing year.


AHEAD


--The USDA will release its weekly export sales report at 8:30 a.m. ET Friday.

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

07-06-23 1611ET