By Kirk Maltais


--Wheat for July delivery fell 1.8% to $6.75 1/4 a bushel, on the Chicago Board of Trade on Tuesday, with traders locking in profits from yesterday's rally brought on by weekend frost damage in Russia.

--Corn for July delivery fell 1% to $4.67 3/4 a bushel.

--Soybeans for July delivery fell 0.4% to $12.14 1/4 a bushel.


HIGHLIGHTS


Selling the Rally: Wheat reversed after posting a strong start to the week, following a weekend of new frosts hitting Russian crops that weakened expectations for the country's output. The change is seen as a short-term technical move by traders, Doug Bergman of RCM Alternatives said. "The trend is higher, but from a risk management standpoint, it makes sense to be making some sales into the rally," Bergman said.

Turning the Corner: Brazilian crop agency Conab has increased its outlook for the country's corn and soybean crops, although forecasts remain down from this time last year. Conab said in its monthly report it now expects soybean production of 147.7 million metric tons, which is up from 146.5 million tons forecast last month. Corn production is seen at 111.6 million tons, up from 111.0 million tons. Improved rain patterns aided in the development of crops, particularly for soybeans, Conab said. However, the agency notes that crop conditions are varied throughout the country.


INSIGHT


Bogged Down: U.S. corn planting got off to a strong start last month, but has slowed down as weather in some areas of the Midwest has turned less friendly for farmers. The USDA said that 49% of the U.S. crop is planted as of May 12. That's down from the 5-year average of 54%, and below the 60% planted at this time last year. Soybeans are moving along more normally--with planting 35% complete, up one point from the 5-year average, but down 10 points from the same time last year. Slow planting may become a factor supporting CBOT futures longer term, but that didn't come into play today.

Big Haul: Concerns about genetic modifications have Mexico second-guessing its appetite for U.S. corn, but that wasn't apparent in the USDA's notice confirming a large flash today. The agency says that Mexico purchased a total of 405,000 metric tons of corn, with 135,000 tons for delivery in 2023/24, and the remaining 270,000 tons being delivered during the 2024/25 marketing year.

Falling Off: Ethanol inventories have fallen 8% in the past month as crude oil prices have declined, and may drop to their lowest level since mid-December 2023. Supplies have fallen according to the latest weekly data as seasonality sets in, which is when ethanol producers slow production and allow more inventory to be consumed ahead of the busier summer driving season. Analysts surveyed by Dow Jones are now forecasting for U.S. ethanol inventories to drop as much as 1 million barrels for the week ended May 10 versus the previous week, to as low as 23.2 million barrels.


AHEAD


--The USDA will release its weekly export sales report at 8:30 a.m. ET Thursday.

--The CFTC will release its weekly Commitment of Traders report at 3:30 p.m. ET Friday.

--The USDA will release its weekly grains export inspections report at 11 a.m. ET Monday.

--The USDA will release its weekly Crop Progress report at 4 p.m. ET Monday.


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

(END) Dow Jones Newswires

05-14-24 1541ET