By Kirk Maltais
--Wheat for July delivery fell 2.5%, to $6.18 1/2 a bushel on the Chicago Board of Trade on Monday as expectations for a stronger Crop Progress report and low concern about Russia's participation in a renewed grain deal pressured wheat.
--Corn for July delivery fell 0.1% to $5.85 1/2 a bushel.
--Soybeans for July delivery rose 0.6% to $14.28 a bushel.
HIGHLIGHTS
Same Story: Wheat futures continued their negative momentum of the past month in trading on Monday. "There's ideas of continued viability of the Ukrainian grain export corridor and ideas that today's weekly crop progress and condition report may show a fairly decent improvement in winter wheat conditions," said Joel Karlin of Ocean State Research. Supportive weather in the Corn Belt is a near-term source of pressure, as are geopolitical concerns. Russia has threatened to exit the Black Sea Grain Initiative in May, but traders are reluctant to add risk premium to futures since Russia has now twice renewed the original deal reached last year.
Bright Outlook: Traders are increasingly expecting the global climate to shift to El Niño by this summer - which in turn is expected to continue healthy crop development in the U.S. Corn Belt. "It's all about the weather near-term," said Arlan Suderman of StoneX in a note. "Traders assume that a rapidly developing El Niño weather pattern will provide a favorable growing season for trend or higher corn and soybean yields this year, so the next best possible threat would be the inability to plant crops."
INSIGHT
Taking Their Lumps: Grain futures suffered steep selling in April. Through April, the continuous corn contract shed 11.5%, while the soybean contract fell 6.8% and wheat shed 8.4%. Falling prices for Brazilian exports were a big source of pressure for U.S. grains last month. "The CBOT corn and beans have priced much of this in now, it will be very interesting to see how the back of the curve performs," said John Payne of Hedgepoint Global in a note. "Near-term lows have probably been scored on both old and new crop corn, for now."
Turning the Corner: U.S. corn export inspections have jumped considerably from the past week, according to government data. In its latest grain export inspections report for the week ended Apr. 27, the USDA said corn export inspections totaled 1.52 million metric tons, which is up more than 60% from the previous week. Traders have been closely eyeing how export demand fares, both new sales as well as inspections of grain before being shipped abroad. While the surge is beneficial for the corn export market, inspections for the 2022/23 marketing year remain well behind last year's pace. Corn export inspections are down 34.7% from the previous marketing year.
AHEAD
-Ingredion Inc. will report its first-quarter earnings before the stock market opens Wednesday.
--The EIA will release its weekly ethanol production and stocks report at 10:30 a.m. ET Wednesday.
-Corteva Inc. will release its third-quarter earnings report at 5 p.m. ET Wednesday.
-Kellogg Co. will release its first-quarter earnings report at 5 p.m. ET Wednesday.
Write to Kirk Maltais at Kirk.Maltais@WSJ.com
(END) Dow Jones Newswires
05-01-23 1501ET
