By Kirk Maltais

-- Soybeans for May delivery rose 1.2% to $14.49 3/4 a bushel on the Chicago Board of Trade Monday, with near-record highs in prices failing to derail strong demand for exports.

-- Corn for May delivery rose 1.1% to $5.92 a bushel.

-- Wheat for July delivery fell 0.2% to $6.53 3/4 a bushel.

HIGHLIGHTS

No Stopping Them: Demand rationing isn't curbing consumption of U.S. soybeans, meaning supply is expected to grow very thin as the year progresses, said Tomm Pfitzenmaier of Summit Commodity Brokerage.

"The tight supplies in the U.S. continue and with the harvest winding down in Brazil, the demand for U.S. soybeans is expected to remain strong which will continue to drain U.S. soybean supplies," said Mr. Pfitzenmaier. "Product availability is setting up to be a real problem by mid-summer as the U.S. runs low on beans to crush and we believe that strong commercial demand will ultimately keep soybeans well supported and force soybean prices higher."

No Rain, No Gain: South American weather was a major source of support for both corn and soybean futures Monday.

"Today's biggest weather concern is the 2021 Brazilian corn crop," said AgResource. "The forecasts offer limited rain for the next two weeks amid near to above-normal temperatures with highs holding in the 80's to lower 90's."

What happens to the Brazilian corn crop is of great importance to U.S. farmers, says the firm. "Any loss of the 2021 Brazilian corn crop will be directed right to the U.S. with nearly a 1:1 relationship in terms of what Brazil does not export from August into January -- the U.S. will."

More Weather Worries: While Brazilian weather was a main factor for U.S. grains futures Monday, U.S. weather also played a part, said Craig Turner of Daniels Trading.

"Dry conditions in the Northern Plains have helped Minneapolis wheat but there is a lot of corn planted up north too and that is supportive for old and new crop," said Mr. Turner. "While problems exist with new crop, old crop will have to rally too ... the market will need to price ration both crop years to make sure the market has adequate stocks for the 2021-2022 marketing year."

INSIGHTS

Trade Questions: The economic conditions for U.S. farmers are stronger than experts had previously expected, said Tom Halverson, head of agricultural lender CoBank. Even so, one open question is how the Biden administration will handle trade relations.

"It's very unclear how trade policy will go moving forward," said Mr. Halverson. "What's less clear to me is what they want to achieve."

Specifically, how Biden approaches global trade may impact export sales of U.S. grains, which is of chief importance to the market, he said.

"What the agricultural sector needs is maximum access to the most amount of markets throughout the world," said Mr. Halverson.

Chinese Support: U.S. inspections of corn set to be shipped to China was a main supporter for corn export inspection figures this week. In its weekly report the USDA said export inspections of U.S. corn totaled 1.5 million metric tons for the week ended April 15. That's down from 1.7 million tons the previous week but well above the 731,000 tons of corn inspected for export at this time last year.

China was again the leading destination for U.S. corn for the week, with over 560,000 tons of corn sent there. Mexico, Japan and Korea were also leading buyers of U.S. corn.

AHEAD:

-- The EIA is scheduled to release its weekly ethanol production and stocks report at 10:30 a.m. EDT Wednesday.

-- Ethanol producer Valero Energy Corp. is due to release its first-quarter earnings before the market opens Thursday.

-- 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 cold storage report at 3 p.m. EDT Thursday.

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

(END) Dow Jones Newswires

April 19, 2021 16:07 ET (20:07 GMT)

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