By Kirk Maltais
--Wheat for July delivery fell 1.2%, to $6.52 1/4 a bushel, on the Chicago Board of Trade on Monday, with new rainfall expected to hit parched Southern Plains wheat crops.
--Corn for July delivery fell 0.2%, to $5.96 3/4 a bushel.
--Soybeans for July delivery fell 0.1%, to $14.35 1/4 a bushel.
HIGHLIGHTS
Rain Infusion: A storm forecast to move through the Southern Plains is expected to bring much-needed rain to wheat crops that sorely need it. AgResource forecasts that heavy rains are expected to come with a storm system moving through Oklahoma and Texas through the middle of the week, which may bolster soil moisture to nurture spring wheat crops being planted, although it is unlikely to rescue the poor condition of winter wheat crops. The system is expected to then travel to the Midwest, giving early planted crops needed rain. "Enough Midwest rain will fall for early germination and emergence," said AgResource.
Prep Time: For grains as a whole, trading today was dominated by cautious preparation for Friday's WASDE report from the USDA, which may contain surprises that send futures skyrocketing or tumbling. "Nearly everything in the market to start the week is being based on positioning," said Karl Setzer of Mid-Co Commodities. "I expect to see choppy trade all week with futures hitting both sides of unchanged ahead of that."
INSIGHT
Mass Short Potential: Short covering in grains may come to fruition throughout this week, as traders look to mitigate their risk ahead of Friday's WASDE report. In last Friday's CFTC report, the agency reported that funds grew their short positions in corn by over 60,000 contracts through May 2, while soybean contracts rose by over 20,000 contracts and wheat grew by nearly 30,000 contracts. These large short positions are seen as giving traders an ample cushion to cover shorts ahead of the report, which would push prices up, said Doug Bergman of RCM Alternatives in a note.
Pulling Back: Inspections of U.S. grain exports pulled back this week, hitting the brakes on an improved pace of shipments reported last week by the USDA. For the week ended May 4, the USDA said corn export inspections totaled 963,351 metric tons, which is down from 1.52 million tons inspected last week. Meanwhile, soybean inspections totaled 394,755 tons and wheat inspections totaled 209,138 tons, both down from the previous week. Totals for inspections also fell below the expectations of analysts, said Terry Reilly of Futures International in a note following the report's release. Additionally, China fell off of being the top destination for U.S. corn and soybeans, which traders regard as a bad sign for export demand.
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 monthly world supply and demand report at noon ET Friday.
--The CFTC will release its weekly Commitment of Traders report at 3:30 p.m. ET Friday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
05-08-23 1526ET
