By Kirk Maltais

-- Corn for July delivery fell 3.7% to $6.59 1/4 a bushel on the Chicago Board of Trade Monday in reaction to rainfall hitting U.S. growing areas over the weekend.

-- Soybeans for July delivery fell 2.4% to 14.72 1/4 a bushel.

-- Wheat for July delivery fell 0.9% to $6.74 1/2 a bushel.

HIGHLIGHTS

Weather Relief: Grain futures trading on the CBOT turned sharply lower Monday in response to wetter and cooler conditions across the U.S. Midwest.

"The National Weather Service shows above-normal rains and average temperatures across the Midwest in the 8- to 14-day range," said Terry Reilly of Futures International. Grain traders will likely make most of their decisions based on any changes to the forecast this week, he said.

See You in Court: Reports Friday that the Biden administration may provide some kind of relief for oil refiners from laws mandating biofuel blending continued to be a point of pressure for grain futures Monday.

This, combined with worries about weather supporting strong crops has futures lower Monday, said Arlan Suderman of StoneX.

If the Biden administration pushes forward with relief for oil refiners, then it will run counter to court decisions that struck down the Trump administration's usage of waivers for small oil refineries, allowing them to circumvent requirements for the amount of ethanol blended into their gasoline.

Soy Selloff: Soybean futures found their lowest levels since late April -- and haven't traded this low since April 23 -- with the contract falling over 7% in the past four trading sessions.

Traders sold roughly 13,000 contracts of soybeans through midday Monday, according to AgResource. The main factors pushing soybeans and other grains lower are Midwest rainfall and anxiety over the Biden administration's possible moves to provide relief for oil refinery blending mandates.

INSIGHTS

Paring Back Bets: Fund traders continued to pull back on long positions in corn in the past week, according to the latest data from the CFTC. In the latest commitments of traders report released after the close of trading Friday, CFTC figures showed managed money funds had reduced corn long positions by just over 7,000 contracts for the week ended June 8, bringing the net position to nearly 278,000 contracts. The data show that traders continue to backtrack from holding a record-size long position in corn over recent months.

"Since the April peak it has been cut by one-third," said Ole Hansen of Saxo Bank.

Watching and Waiting: Grain futures were sharply lower, with traders shedding weather premium amid rainfall in growing areas over the weekend.

However, Monday's crop progress report from the USDA, due after the market closes, may cause a shift in momentum.

"This afternoon's weekly crop condition report will be watched closely to see if the dry conditions in some key states is starting to take a toll on the crop," said Tomm Pfitzenmaier of Summit Commodity Brokerage. "You do not have to talk to many farmers in those areas to learn that the heat and lack of rainfall is still sharply reducing their yield potential."

While many areas have received rain, other growing areas have been largely missed by rains, something Monday's report may reflect.

Missing the Mark: Export inspections of U.S. soybean exports fell this week, dropping below both last week's figure and exports from this time last year. Export inspections of U.S. soybeans totaled 128,092 metric tons for the week ended June 10, according to the USDA. That's down from 239,384 tons inspected last week, and from 435,469 tons inspected at this time last year.

After being a strong buyer of U.S. soybeans earlier this year, China's presence on the export market has diminished, with less than 3,000 tons of soybeans inspected for shipment there for the week.

AHEAD

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

-- The USDA is due to release its weekly export sales report at 8:30 a.m. 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

June 14, 2021 15:54 ET (19:54 GMT)

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