By Kirk Maltais
-- Soybeans for July delivery fell 0.8% to $10.49 3/4 a bushel on the Chicago Board of Trade on Wednesday, with traders unmoved by announcements about a U.S.-China trade deal and uncertain about how positive Thursday's WASDE report from the USDA will be.
-- Corn for July delivery declined 0.5% to $4.36 1/2 a bushel.
-- Wheat for July delivery fell 0.1% to $5.34 1/4 a bushel.
HIGHLIGHTS
Reports Pending: CBOT grain futures remained tentative ahead of crop reports coming from U.S. and Brazilian agricultural agencies Thursday.
The USDA is scheduled to issue its latest WASDE at noon EDT, while Brazilian crop agency Conab will release its latest assessment of the country's crops.
The update of both forecasts will be closely watched by grain traders, AgResource said in a note.
"Traders fear that this report reflects a decrease in U.S. feed and residual use based on the record-high dry matter content of the 2024 U.S. corn crop," the firm said.
Cautious Optimism: President Trump's post on Truth Social announcing a trade deal between the U.S. and China is positively received by grain traders, although traders didn't immediately jump on the assumption that more Chinese export purchases are on the way.
"For now, it appears that the U.S. and China are back on track," said Brian Pullam of Linn & Associates. "The ag markets seem to approve as perhaps this is an important step to addressing the disregarded Phase One agreement and ag purchases."
Smaller Piece of the Pie: Imports of soybeans by China in May more than doubled from the previous month.
China imported 13.9 million metric tons, a big ramp-up in buying, according to Commerzbank.
The firm adds that roughly 75% of these imports likely came from Brazil, although it isn't until later this month that this data point is confirmed.
"The tariffs were significantly lowered again in mid-May," Commerzbank said. "However, they are still likely to be too high to make U.S. soybeans attractive to Chinese buyers."
Brazil is typically seen as the primary supplier of soybean exports at this time of year.
INSIGHT
Moving the Needle: Expectations are low for a trade deal with China, as announced by President Trump on his Truth Social account this morning.
"Its scope seems to be limited to easing some recent non-tariff restrictions, including China's rare earth export controls," said Mark Williams of Capital Economics in a note. "The wider trade and economic issues that were supposed to be the focus of negotiations after the Geneva talks have not been addressed."
A tariff of 55% on Chinese goods remains in place, along with a 10% countertariff on U.S. goods by China.
Williams adds that the U.S.-China relationship is "in concrete terms in far worse shape than a few months ago."
A New Level: The average rate of ethanol production in the U.S. rose to a record high, the EIA said Wednesday.
Ethanol production in the U.S. averaged 1.12 million barrels a day for the week ended June 6, the new all-time record high that beats the previous record of 1.119 million barrels a day from November 2024.
Surveyed analysts forecast production to land anywhere from 1.072 million to 1.104 million barrels a day. Total stocks of ethanol fell for the week, dipping to its lowest since December at 23.73 million barrels.
AHEAD
-- The USDA is scheduled to release its weekly export sales report at 8:30 a.m. EDT Thursday.
-- The USDA is due to release its monthly WASDE report at noon EDT Thursday.
-- The CFTC is scheduled to release its weekly Commitments of Traders Report at 3:30 p.m. EDT Friday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
06-11-25 1552ET
