By Kirk Maltais

 

--Soybeans for November delivery fell 2.5% to $13.19 3/4 a bushel on the Chicago Board of Trade Tuesday in response to lacking demand for U.S. soybean exports by China.

--Corn for December delivery fell 1.3% to $5.51 3/4 a bushel.

--Wheat for September delivery fell 0.7% to $7.24 1/2 a bushel.

 

HIGHLIGHTS

 

Mediocre Appetite: Soybeans led CBOT grain futures lower in trading Tuesday. One factor sinking soybeans in particular is China's hesitation in buying more U.S. soybean exports, which has traders wondering how much lower prices have to go before China's interest is rekindled. "China has been largely absent for weeks from the U.S. soybean market after making record large purchases back in March/April," said AgResource. "Brazil will mostly fill China's soybean demand in September, with the U.S. taking over in early October. [We look] for China to start a U.S. purchase program in the next few weeks."

Unexpectedly Positive: Grain futures trading on the CBOT were hit with pressure early in trading Tuesday, in reaction to a crop progress report from the USDA released Monday showing improvements to soybean and wheat crop conditions. Soybeans rose two points to 60% good-or-excellent condition, while wheat rose one point to 10% good-or-excellent condition. Meanwhile, corn condition fell two points to 62% good-or-excellent. "Weekly crop ratings caught [the] trade by surprise," said Karl Setzer of AgriVisor.

 

INSIGHTS

 

Rain Wave: New rainfall is expected to hit U.S. crop-growing regions later this week heading into the weekend, which may provide grain futures with pressure as the week moves forward. According to DTN, scattered showers are expected to move through growing regions beginning on Thursday, with temperatures easing in the Western Corn Belt. However, this influx of rain may provide only limited pressure on futures. "Iowa, Wisconsin and northern Illinois have an opportunity for rain later this weekend into early next week, but some models look dry after that occurrence," said Terry Reilly of Futures International.

Ease in Sentiment: Drops recorded to U.S. farmer sentiment in recent months have eased, according to the most recent Ag Economy Barometer published by Purdue University and the CME Group. According to this month's study, producer optimism measured 134 points out of a maximum of 200, only down 3 points from July and ending a streak of sharp drops in the barometer. "Recent sentiment readings suggest farmers remain cautiously optimistic about financial conditions on their farms," said James Mintert, the barometer's lead investigator and director of Purdue's Center for Commercial Agriculture. Mr. Mintert adds that lower crop prices was a source of pressure for this month's survey, which was conducted through a telephone survey of 400 U.S. agricultural producers.

Steady Figures: Ethanol production and stockpiles are expected to stay relatively steady in this week's report from the EIA, according to analysts surveyed by Dow Jones this week. According to analysts surveyed this week, daily ethanol production is expected to be anywhere from 1 million barrels per day to 1.03 million barrels per day for the week ended July 30, versus 1.01 million barrels last week. Meanwhile, ethanol inventories are expected to be steady as well, at 22.73 million barrels to 22.93 million barrels for week versus 22.73 million barrels last week. Usage of U.S. corn for ethanol production is up this year, according to USDA data.

 
AHEAD 
 

--The EIA will release its weekly ethanol production and stocks report at 10:30 a.m. ET Wednesday.

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

--Beyond Meat Inc. will release its second-quarter earnings report after the stock market closes on Thursday.

--Corteva Inc. will release its second-quarter earnings report after the stock market closes on Thursday.

 

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

 

(END) Dow Jones Newswires

August 03, 2021 14:56 ET (18:56 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.