By Kirk Maltais
--Corn for December delivery fell 4.3% to $5.36 3/4 a bushel, on the Chicago Board of Trade on Wednesday, in response to weather forecasts calling for ample rainfall through mid-July.
--Wheat for September delivery fell 4.2% to $6.69 3/4 a bushel.
--Soybeans for November delivery fell 2.3% to $12.65 a bushel.
HIGHLIGHTS
Turning On the Faucet: A wetter outlook for the U.S. Corn Belt through July was the main source of price pressure today. According to data from the National Centers for Environmental Prediction, many parts of the Corn Belt that have been turning dry over the past month are expected to get more rain than usual for this time of year over the next two weeks. That's a big change from earlier indications that El Nino would limit rainfall for thirsty crops. Over the past 24 hours, rainfall has favored the Dakotas and Northern Nebraska, says Matt Zeller of StoneX in a note.
Risk-Off Mentality: While much of the selling today was tied to the short-term precipitation outlook, the impending release of the USDA's Acreage and Stocks reports on Friday had traders preparing for volatility by paring their positions in grains. "It was an all-in market, so now it's an all-out market," said Don Roose of U.S. Commodities. Roose calls Friday's reports a "speed bump" complicating market psychology. Corn futures have been taking the brunt of selling, falling nearly 15% in the past week.
Scope of the Fallout: The volatility in Russia in the wake of an attempted mutiny by the Wagner Group has grain traders wondering what it might mean for the global wheat market - providing traders with a reason to sell in the short-term. A disruption to the Russian government is a risk factor for wheat, said John Payne of Hedgepoint Global. Scenarios like Russia hoarding its wheat and not selling it abroad may lift futures, while Russia abandoning its price floor in favor of increased export sales could sink them.
INSIGHT
Week by Week: With sizable rainfall finally arriving to much of the U.S. Corn Belt, the question grain traders now have is whether it's too late for distressed crops to bounce back from the punishing conditions of the past few weeks. In casting their judgment, traders will be analyzing the USDA's weekly Crop Progress reports, said Tomm Pfitzenmaier of Summit Commodity Brokerage in a note. "The crop condition rating is expected to show another slight drop in next week's report and then it is hoped that the upcoming rainfall will stabilize the crop and then we will have to see how the weather shapes up for the pollination period," he said, adding that while the rainfall is good for crops, it may not sufficiently replenish Midwestern subsoil.
Flimsy Demand: Analysts surveyed by the Wall Street Journal this week say new sales of corn and wheat could both be below the 100,000 metric ton-mark, with soybean sales expected between 200,000 tons to 700,000 tons. Low sales would contribute to the belief that demand for U.S. grains this year are middling, amid record-high prices seen last year.
AHEAD
--The USDA will release its weekly export sales report at 8:30 a.m. ET Thursday.
--The USDA will release its quarterly hogs and pigs report at 3 p.m. ET Thursday.
--The USDA will put out its annual acreage report, along with its grain stocks report at noon ET Friday.
--The USDA will issue its monthly agricultural prices report at 3 p.m. ET.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
06-28-23 1551ET
