By Kirk Maltais


-- Wheat for September delivery fell 2% to $6.53 3/4 a bushel on the Chicago Board of Trade on Tuesday, with funds selling as weather in the U.S. turns more supportive for grains and Russia's Black Sea blockade gets challenged.

-- Corn for December delivery fell 1% to $5.08 1/4 a bushel.

-- Soybeans for November delivery rose 0.9% to $13.44 1/2 a bushel.


HIGHLIGHTS


Good Time to Sell: Funds find themselves selling more agricultural futures Tuesday, with improved weather conditions ahead of August's WASDE providing a jump-off point for sellers, said Charlie Sernatinger of Marex in a note. It comes counter to the wave of short covering reported by the CFTC in its last Commitments of Traders Report on Friday, which showed sizable closing of short positions by fund traders.

What next week's WASDE report says about projected yields and acreage is expected to be important for trader sentiment, Sernatinger said.


New Challenge: Wheat futures also felt the weight of a challenge to Russia's blockade of Ukrainian ports. An Israeli vessel reportedly traveled through the blockade and arrived in Ukrainian waters,

"The next question then is, how will Russia respond?" said Arlan Suderman of StoneX in a note.

Russia's end to its participation in the Black Sea export deal was expected to limit Ukrainian shipments going forward.


INSIGHT


Possible Turning Point: Conditions for U.S. crops inched lower through the end of July, but future weather appears to be supportive for improving crop quality going forward.

The USDA said 55% of U.S. corn is in good or excellent condition, which is down from 57% in last week's report. Fifty-two percent of soybeans are in good or excellent condition, which is down from 54%, and spring wheat is down to 42% good or excellent, which is a drop-off from 49% previously.

Even so, the outlook for future weather may help turn conditions around, leaving grain futures as a mixed bag, said Doug Bergman of RCM Alternatives.


Glass Half Full: According to a survey performed by a partnership of Purdue University and the CME Group, farmers grew more optimistic last month about the economy.

"Producers were slightly more confident about the farming economy in July, despite recent crop price volatility and continued concerns about rising interest rates," said James Mintert, the barometer's principal investigator and director of Purdue University's Center for Commercial Agriculture.


AHEAD


-- The EIA is scheduled to release its weekly ethanol production and stocks report at 10:30 a.m. EDT Wednesday.

-- The USDA is due to release its weekly export sales report at 8:30 a.m. EDT Thursday.

-- The U.S. Drought Monitor is scheduled to release its updated map at 8:30 a.m. EDT Thursday.


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


(END) Dow Jones Newswires

08-01-23 1600ET