By Kirk Maltais
--Corn for December delivery fell 2.4% to $3.36 1/2 a bushel on the Chicago Board of Trade on Monday, as traders expect any heat damage to crops to stay limited.
--Soybeans for November delivery fell 1.7% to $8.75 1/4 a bushel.
--Wheat for September delivery fell 1.7% to $5.24 3/4 a bushel.
HIGHLIGHTS
Simmering Summer: The weekend weather contained scattered showers and thunderstorms in crop-growing regions, and the weather this week doesn't look to be as unrelentingly hot as previously expected. "Heat is more east focused, but still not quite as intense as expected, with better chances of rain than previously thought," said Arlan Suderman of StoneX. Isolated showers are projected in the Midwest this week, according to agricultural research firm DTN.
Lying In Wait: Expectations that Monday's crop progress report would show degradation in the quality of U.S. corn and soybean crops placed a floor on how much grain traders would sell off positions, said AgResource, predicting that late-week weather outlooks will soon become a more dominant factor in trading.
Getting Perky: Export inspections for U.S. wheat are higher this week, totaling 624,211 metric tons, according to the USDA. It's the largest export inspections amount for wheat since the week of June 18, according to the USDA. Part of the increase is due to interest from China.
INSIGHTS
What's Next? Reports that President Trump is doubtful about moving forward with a second phase of trade agreements with China due to dissatisfaction about Beijing's actions in the early days of the coronavirus outbreak caused some uncertainty among grain traders. However, thanks in part to the USDA announcing a large Chinese purchase of U.S. corn on Friday, traders are skeptical that purchases pursuant to the phase one trade agreement will stop. "[Trump's] comments on Phase 2 was not a positive but not sure the market really believes much that is said in regards to the trade deal as buying appears to be present," said Richard Buttenshaw of Marex Spectron.
Bustle In Your Hedgerow: Without a major drought hurting what's expected to be a large soybean crop in the 2020/21 marketing year, the price of soybeans is most reliant on a timely and smooth recovery from the coronavirus pandemic, said Todd Hubbs of the University of Illinois. "Without a crop shortfall, higher soybean prices rely on demand prospects over the next year," Mr. Hubbs said. "Increased demand is linked to the nascent economic recovery and recent developments provide limited support for economic growth prospects." U.S. coronavirus cases topped 3.3 million Monday, with states like Florida reporting a resurgence in the virus. Lingering coronavirus will hurt meat consumption in the U.S., consequentially impacting demand for soybean feed, Mr. Hubbs said.
AHEAD
--The EIA releases its weekly update on ethanol production and inventories at 10:30 a.m. ET Wednesday.
--The USDA will release its latest weekly export sales numbers at 8:30 a.m. ET Thursday.
-- Rail transportation provider Kansas City Southern reports its second-quarter earnings before the market opens on Friday.
--The CFTC releases its weekly commitment of traders report at 3:30 p.m. ET Friday.
Write to Kirk Maltais at kirk.maltais@wsj.com
