By Kirk Maltais
-- Corn for December delivery fell 1.9% to $4.04 1/2 a bushel on the Chicago Board of Trade on Tuesday after the USDA reported an improved crop condition over the past week, which is opposite of what traders and analysts anticipated.
-- Soybeans for September delivery fell 1.9% to $10.20 1/2 a bushel.
-- Wheat for December delivery fell 1.6% to $5.22 3/4 a bushel.
HIGHLIGHTS
Revised Higher: The only mild revisions to U.S. crop health -- with corn ratings rising from the previous week, despite an influx of heat hitting many crop areas -- pushed CBOT grains down in Tuesday's session, particularly impacting corn.
In its report Monday afternoon, the USDA said 68% of the corn crop is in good or excellent condition, up one point from the previous week. Soybean condition was at 67% good or excellent, down one point.
A larger drop in condition was expected for both crops, Argus said in a note.
Milder Forecast: Crops in the northern portions of the U.S. Corn Belt are expected to be greeted with near-normal and below-normal temperatures in the coming weeks.
The NOAA says North Dakota will receive below-average temperatures between Aug. 6-12, with South Dakota and Wisconsin also looking at less-than-normal heat.
Rain is also expected for the Corn Belt, with the NOAA forecasting that most of the region will receive above-average rainfall.
This is a change from the preceding week, in which higher temperatures and lower chances of substantial rain were forecast.
INSIGHT
Speculation About Size: Analysts and traders speculate the USDA may actually raise its outlook for corn yield in its next WASDE report, with the current outlook of 181 bushels an acre already a record-high by nearly 4 bushels an acre.
A more detailed inspection of planted corn acres could result in a yield as high as 182.5 bushels an acre, said Naomi Blohm of Total Farm Marketing in a note. Other firms forecast a yield of over 183 bushels per acre.
Sopping Wet: An abundance of rain hitting French wheat has intermittently lifted world wheat prices, including CBOT futures.
But strong crops out of competing areas like the U.S. have erased any gains, as have better-than-expected yields for Russian crops, said Commerzbank in a note. The pace of the French harvest is 35 points behind this point last year, the firm said.
Tough Month: Investors are examining their exposure to grain futures after the pressure seen on those prices this month.
All three row crops in July have had supportive weather in the Corn Belt. From July 1, soybeans have fallen roughly 8%, corn 4%, and wheat 11%.
Grains in July hit lows last seen during the Covid-19 pandemic in 2020. Traders don't appear confident in a turnaround as August unfolds, with lower wheat and soymeal playing a big role in the drop of the overall Bloomberg Commodity Index, Robert Yawger of Mizuho Securities USA said in a note.
AHEAD
-- The EIA is scheduled to release its weekly ethanol production and stocks report at 10:30 a.m. EDT Wednesday.
-- Corteva Inc. is due to release its second-quarter earnings after the stock market closes on Wednesday.
-- 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 grain crushings report at 3 p.m. EDT Thursday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
07-30-24 1533ET
