By Kirk Maltais
--Wheat for July delivery fell 1.9% to $5.80 1/2 a bushel, on the Chicago Board of Trade on Tuesday, after the USDA reported that the winter wheat harvest is well ahead of its normal rate.
--Corn for July delivery rose 1% to $4.48 a bushel.
--Soybeans for July delivery rose 1.3% to $11.72 1/2 a bushel.
HIGHLIGHTS
Out of the Gate: Winter wheat harvesting in the U.S. is 27% complete, the USDA said in its latest Crop Progress report. That's up from the 5-year average of 14%. Combined with improving crop conditions for the spring wheat crop, traders and analysts believe the U.S. will have a strong showing for wheat output this year. "The condition of the spring wheat is also significantly better than a year ago," said Commerzbank in a note. "This gives hope for a robust harvest overall." This counteracted the effect of a reduced outlook for Russian production in Tuesday's trading.
Preparing for the Heat: Corn and soybeans are higher on the CBOT, with traders and analysts looking ahead to a wave of hot weather hitting American growing areas. This is being done by traders adding 'weather premium' to futures prices - with futures on the rise in the event of heat hurting yields. The heart of the summer growing season is ahead for Northern Hemisphere crops," said AgResource in a note. "The U.S. corn yield is determined in July and soybeans in August and high pressure ridging is forecast to return."
INSIGHT
Continuing Withdrawal: The next wave of crop production out of Russia is expected to drop from previous years, said SovEcon in a note. The agricultural research firm forecasts total production to be 127.4 million metric tons, down 12% from 144.9 million tons from the previous year. Wheat production is expected to be down 13% to 80.7 million tons, while barley is expected to drop 12% to 18.6 million tons with corn falling 12% to 14.6 million tons. "The yield of the three main crops is expected to be lower than last year due to weather anomalies in recent months," said the firm. Recent weather is expected to maintain stress on Russian crops - and with Russian wheat being the leading wheat product on world export markets, world prices will likely move as a result.
Veering Off a Cliff: Analysts surveyed by Dow Jones said that they expect U.S. ethanol stockpiles to fall in this week's report from the EIA, which is due out Thursday. Analysts forecast stocks to drop to as low as 22.7 million barrels--where they were back in December--down from 23.22 million barrels reported last week. Analysts also project daily average production of ethanol to decline, potentially as low as 1 million barrels a day. Ethanol is a chief consumer of U.S. corn, according to USDA data.
AHEAD
--The CBOT and USDA will be closed in observance of Juneteenth. Both will reopen on Thursday.
--The EIA will release its weekly ethanol production and stocks report at 10:30 a.m. ET Thursday.
--The USDA will release its weekly export sales report at 8:30 a.m. ET Friday.
--The USDA will release its monthly Cattle on Feed report at 3 p.m. ET Friday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
06-18-24 1513ET
