By Kirk Maltais


--Corn for December delivery rose 1% to $4.87 a bushel, on the Chicago Board of Trade on Tuesday, coming back from a long holiday weekend with heat still hitting U.S. crops.

--Wheat for December delivery rose 0.9% to $6.01 3/4 a bushel.

--Soybeans for November delivery fell 0.2% to $13.67 1/2 a bushel.


HIGHLIGHTS


Blazing Sun: Grain traders and analysts are expecting to see information released this week that will confirm hot weather is degrading crop conditions in many growing areas - bad timing ahead of the harvest. "We do expect crop deterioration with unfavorable hot and dry Central U.S. weather conditions," said Daniel Flynn of Price Futures Group in a note. The last release from the U.S. Drought Monitor shows spreading extreme drought in northern Iowa, southern Wisconsin, and northern Minnesota.

Geopolitical Focus: Negotiations between Russia and Turkey over the weekend to resurrect some form of the Black Sea Grain Initiative failed to produce any results, lifting wheat futures today. "Russia still says they won't rejoin the deal unless they are allowed back on the SWIFT banking system," said Doug Bergman of RCM Alternatives. However, Bergman adds, wheat futures may have found a near-term low, and have room to bounce back.


INSIGHT


Softening Demand: U.S. export inspections of corn and wheat fell back for the week ended Aug. 31, according to USDA data. The government said corn export inspections totaled 481,309 metric tons, and wheat inspections totaled 299,862 tons - both of which are off from the tallies reported by the USDA last week. Soybean export inspections turned higher from the previous week - totaling 378,525 tons. For the 2022/23 marketing year, corn inspections are off 32% from the prior year, while soybean inspections are down over 8% and wheat is nearly 24% lower. The gap in wheat inspections has grown in recent weeks.

Shake it Off: S&P Global Commodity Insights forecasts that hot temperatures seen in spurts this summer may impact final soybean production, but corn production may power through - with corn output seen at 15.4 billion bushels, which would be an all-time U.S. record. While moisture has been lacking in many areas of the country, advanced genetics and a favorable spring planting season has allowed corn to thrive, said Peter Meyer of S&P Global. "Respondents to our survey remained optimistic that modern seeds were up to the challenge in 2023", he said.

Growing Cloudy: Farmers in the U.S. are growing more sour about the prospects for the agricultural economy, according to the latest survey from Purdue University and the CME Group. "Rising interest rates and concerns about high input prices continue to put downward pressure on producer sentiment," said James Mintert of Purdue. "This month over half of the producers we surveyed said they expect interest rates to rise in the upcoming year."


AHEAD


--The Federal Reserve Banks will release the Beige Book at 3 p.m. ET Wednesday.

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

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

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


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


(END) Dow Jones Newswires

09-05-23 1531ET