By Kirk Maltais
--Wheat for September delivery rose 3.8% to $6.57 1/4 a bushel, on the Chicago Board of Trade on Monday, with fighting between Russia and Ukraine over the weekend sparking fresh concerns about wheat exports from the region.
--Corn for December delivery rose 0.2% to $4.98 a bushel.
--Soybeans for November delivery fell 2.2% to $13.03 3/4 a bushel.
HIGHLIGHTS
Bomb Shells: Fresh fighting in the Russia-Ukraine war was a source of support for CBOT wheat futures. "The Russia-Ukraine war continued to escalate over the weekend, increasing the risks that we could see an eventual slowdown in the movement of commodities out of Russian ports," said Arlan Suderman of StoneX in a note. Russia and Ukraine traded grain strikes into today, with Russia targeting Ukraine's port infrastructure - including grain storage units.
Pop of Precipitation: Rainfall seen over the weekend in U.S. crop-growing areas is expected to be seen throughout this week - in turn pressuring grain futures for most of the day. Forecasts show a system moving through the Midwest into the East Coast. Temperatures are expected to be below normal in the earlier half of the week, before turning higher later on, according to agricultural research firm DTN - adding that this week's forecast appears to be an extension of the activity seen this weekend. Traders anticipate the next weekly Crop Progress report to show improvements to crop quality across the board.
Pressure Point: Soybean futures on the CBOT were particularly affected by the weather - thanks to the overwhelming long position fund traders have on soybeans. "The weather forecast for August has been improving and with the funds holding a decent sized long position liquidation of some of that long position was inevitable given the forecast," said Tomm Pfitzenmaier of Summit Commodity Brokerage in a note. On Friday, the CFTC reported in its Commitment of Traders report that through August 1, managed money held a long position just under 100,000 contracts in soybeans, giving funds plenty of room to liquidate positions.
INSIGHT
Bracing for Friday: Across the board, traders are preparing ahead of Friday's WASDE report from the USDA, which will show updates for U.S. crop production projections, as well as crop yields and other categories. Traders are being generally cautious ahead of the approaching USDA report, reluctant to take on new long positions in the midst of further volatility. "Due to volatility swings traders are reluctant to add more risk tolerant positions," said Daniel Flynn of Price Futures Group in a note.
Slow and Low: U.S. grain export inspections dropped back for the week ended Aug. 3, with yearly inspection totals continuing to lag behind the previous year's pace. In its latest grain export inspections report, the USDA said corn export inspections totaled 376,623 metric tons, soybean inspections totaled 281,857 tons, and wheat inspections totaled 275,067 tons. For the 2022/23 marketing year, corn inspections are down 33% from the prior year, while soybean inspections are down 6.9% and wheat is down 14.1%.
Growing in Value: Land values for farms in the U.S. surged this year, the USDA reported on Friday. In its yearly report, the USDA says that the national average for the cost of farm real estate is $4,080 per acre this year, up $280 per acre or 7.4% from last year. It's the second-largest uptick per acre since the survey first started in 1997, according to the American Farm Bureau Federation. More expensive farmland comes as inflation lifts the costs for farmer's input costs, tightening margins.
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 US Drought Monitor will release its updated map at 8:30 a.m. ET Thursday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
08-07-23 1550ET
