By Kirk Maltais
-- Wheat for July delivery rose 0.7% to $6.44 3/4 a bushel on the Chicago Board of Trade on Thursday in reaction to the increasing sentiment that Russia won't renew its participation in the Black Sea Grain Initiative.
-- Corn futures for July delivery were virtually unchanged at $5.90 a bushel.
-- Soybeans for July delivery were virtually unchanged at $14.21 1/4 a bushel.
HIGHLIGHTS
All Eyes on Russia: Grain traders are increasingly concerned that attacks in Russian-occupied territory will translate to the Black Sea Grain Initiative not being renewed this month, which has traders adding risk premium to the most-active futures contract.
"The corridor extension looks dead in the water," said Daniel Flynn of Price Futures Group in a note.
In addition to a purported drone attack on the Kremlin Wednesday, Ukrainian forces have been attacking Russian-controlled areas such as Crimea. Traders on Thursday said these actions don't bolster a case for renewing the export deal, especially as Russia complains of its products not being sold on the world market.
Slim Pickings: Corn and soybean futures were bogged down by weak export sales, with traders thinking Brazilian production is offsetting the U.S. on the world stage.
"Corn and beans seem to continue to be under the influence of the Brazilian crop production and lackluster/poor U.S. export sales," said Donna Hughes of StoneX.
U.S. weather also appears to be a factor, with the Midwest looking to dry out and allow farmers back into their fields while rainfall in the Southern Plains isn't expected to provide much help for dismal winter wheat conditions.
INSIGHT
Not Entirely Clear: Traders aren't seeing a clear direction for the grains, said Virginia McGathey of McGathey Commodities.
"The grain futures markets are starving for something to trade on," she said. "The issues in Russia are always at top of mind, although the disinformation makes traders cautious so I'm hesitant to believe it's entirely that."
Weather and export demand are two other factors playing into futures movement, but grain traders are unconvinced as to which direction futures should go.
Cutting Exposure: Following the Federal Reserve's decision to raise interest rates by 25 basis points traders across markets are becoming more cautious in their approach.
In agriculture, that sentiment is also being bolstered by the USDA's WASDE report on May 12, said AgResource in a note.
The report is expected to show the USDA's first estimates regarding the size and scope of the crop being planted this year, and until then futures are locked in a choppy pattern.
Clear Winner: Agriculture company Corteva is raising its 2023 sales guidance to between $18.6 billion and $18.9 billion, and upping its operating earnings guidance to between $2.80 and $3.00 a share for the year. One reason for this is the expectation that crop prices will remain high because of a tight global supply of food.
"The outlook for agriculture remains robust in 2023, with record demand for grain and oilseeds as ending stocks continue to be under pressure," the company said in its earnings release. "Commodity prices are above historical averages, and farm balance sheets and income levels remain healthy."
AHEAD
-- The CFTC is scheduled to release its weekly Commitments of Traders Report at 3:30 p.m. EDT Friday.
-- Tyson Foods Inc. is due to release its second-quarter earnings report before the stock market opens on Monday.
-- The USDA is scheduled to release its weekly grains export inspections report at 11 a.m. EDT Monday.
-- The USDA is due to release its weekly crop progress report at 4 p.m. EDT Monday.
-- Patrick Thomas contributed to this article.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
05-04-23 1601ET
