By Kirk Maltais
--Soybeans for November delivery rose 1.1% to $9.06 1/4 a bushel on the Chicago Board of Trade Monday, as foreign buyers appear to be purchasing more U.S. exports in expectation of extended dryness hurting crop yields.
--Corn for December delivery rose 0.8% to $3.56 1/4 a bushel.
--Wheat for September delivery rose 0.3% to $4.93 1/4 a bushel.
HIGHLIGHTS
Scorched Earth: Higher temperatures in the U.S. Corn Belt are expected to pressure growing crops in the region, which is in turn propelled CBOT grain futures higher. "Parts of the U.S. are expected to experience well-above-normal temperatures...which is a concern, especially if temperatures do not recede at night to give the crop a chance to rest," said Karl Setzer of AgriVisor. Isolated showers are expected in the region this week, but may not be enough to quench dry soils developing, said John Baranick of agricultural weather firm DTN.
Hedging Bets: Even though dry weather prospects kicked futures up Monday, uncertainty about how weather may look in the latter half of the week kept a lid on that movement--with the possibility of scattered rainfall unwinding recent bullishness. "No trader wants to be caught buying the bulge ahead of green blobs on the radar screen," said AgResource. "The forecasts are not wet enough for the bears or hot enough for the bulls."
INSIGHTS
Beat The Heat: The USDA said Monday that 264,000 metric tons of soybeans have been sold to China for the 2019/20 marketing year, the first notice of sales over 100,000 tons to China since June 26. Additionally, 204,000 tons of corn were sold to China for 2020/21, and 182,800 tons of corn were sold to Mexico. Anticipation of hotter temperatures causing increased crop losses and raising prices may be motivating export sales, according to traders. "There is more awareness of potential hot-dry issues coming in the U.S. crop belt," said Michael Zuzolo of Global Commodity Analytics.
Export Inspections Rise: Export inspections for U.S. soybeans are at their highest level since the week of May 7, the USDA said Monday. Soybean export inspections totaled 19.2 million bushels, well up from the previous week's figure of 12.3 million bushels. Combined with Monday's reports of new soybean export sales to China, the new indications of near-term export market demand may give soybean futures a lift this week.
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.
--The USDA will release its monthly WASDE report at noon ET Friday.
--The CFTC releases its weekly commitment of traders report at 3:30 p.m. ET Friday.
