By Kirk Maltais


-- Corn for July delivery fell 1.2% to $4.59 3/4 a bushel on the Chicago Board of Trade on Tuesday, with grain traders unwinding the positions they built after the fighting in Iran began.

-- Soybeans for July delivery fell 0.8% to $11.74 a bushel.

-- Wheat for July delivery rose 0.3% to $6.08 a bushel.


HIGHLIGHTS


Reverse Course: Trading on Tuesday appeared to reflect the trend of grain traders backing out of long positions they entered when the war in Iran began in February, said AgResource in a note.

"Energy and grain prices continue to disconnect on differing fundamentals," said the firm.

AgResource estimates that managed money firms sold 6,700 corn contracts and 6,100 soybean contracts, while buying 1,600 contracts of wheat. Higher crude oil futures were supportive of grains last month, but that association has eroded as forecasts show a large crop output from the U.S. this year.

Rain Dance: CBOT wheat caught support from USDA data signaling damaged winter wheat crops. The USDA's Crop Progress Report published after the market closed Monday showed that good or excellent winter wheat crops totaled 35%, which is down 13 points from this time last year.

Dry weather has hurt the health of U.S. wheat.

"Any benefit from last week's fleetingly wetter regime, which included some high elevation snow and a boost in topsoil moisture, will be lost unless stormy weather soon returns," the USDA said in a separate report, referencing weather in western growing regions.


INSIGHT


Early Signs: CBOT grains were mixed following the USDA's first Crop Progress Report of the year. U.S. farmers nationally have planted 3% of their expected corn crop as of April 5, slightly higher than 2% at this time last year.

"The outlook is neutral for now with little known about the start of the U.S. growing season, but with last week's acre forecast coming in high, balance sheet projections have comfortable supplies," said Doug Bergman of RCM Alternatives in a note.

Bountiful Harvest: Analysts surveyed by WSJ are expecting the USDA to mostly raise its outlook for Brazilian crop output in this week's WASDE report due Thursday. They project increases to Brazilian corn, Argentinian corn and Argentinian soybeans, with a small cut made to Brazilian soybeans.

Should these production figures land where analysts expect, then the global supply pictures for row crops would be even more relaxed than initially anticipated by the market.

Weather in South America has been mostly supportive for crops, although some regions have received excessive rainfall.


AHEAD


-- The EIA is scheduled to release its Weekly Petroleum Status Update 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 USDA is scheduled to release its monthly WASDE report at noon EDT Thursday.


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


(END) Dow Jones Newswires

04-07-26 1528ET