By Kirk Maltais

--Wheat for July delivery rose 0.4% to $4.98 3/4 a bushel on the Chicago Board of Trade Tuesday, with traders inching wheat off a seven-month low on hopes of stronger export sales ahead.

--Corn for July delivery rose 0.2% to $3.21 1/4 a bushel.

--Soybeans for July delivery fell 0.3% to $8.42 1/2 a bushel.

HIGHLIGHTS

Don't Call It a Comeback Yet: Wheat futures inched up Tuesday, although trading on the July contract remains below $5 a bushel. Nations in the Middle East are expected to return to the export market next week, once Ramadan concludes. "The export line up for wheat promises more to come next week with Ramadan ending this weekend," said Charlie Sernatinger of ED&F Man Capital, noting an active tender from Iran looking for August delivery.

Unimpressed: Even though China has been in the market for U.S. soybean exports more recently, it's still behind schedule to meet obligations for $36 billion worth of U.S. agriculture purchases in 2020--and grains traders are concerned that they won't meet those targets. "Since mid-February, total Chinese purchases [of soybeans] have only come to 2.2 million tons," said Rich Nelson of Allendale Inc., who says that this purchasing is behind the pace needed to meet the trade deal's terms. This sentiment among traders dragged beans lower Tuesday.

Sniffing Around: Even with the sentiment that China is lagging on Phase One obligations, reports that China is interested in purchasing more U.S. corn exports propelled corn prices higher Tuesday--although the uptick may be short-lived, according to traders. "China is sniffing around for corn for the second day today, inquiring about pricing," said Arlan Suderman of INTL FCStone. That said, traders are not generally bullish in the longer term on corn's supply and demand prospects, according to Suderman.

INSIGHT

Dollar Weakness, Export Strength: The grain futures market focused mostly on exports Tuesday--even as the USDA's report showed that crop progress in the U.S. is pushing forward at a fast pace. A weaker U.S. dollar has been positive for grains traders looking for a softer dollar in order to make U.S. exports more competitive--however, this year's record corn crop is now 80% planted, the USDA says. That is well beyond the 44% reported at this time last year, meaning that without any sort of major weather issues, the U.S. will have an ample crop and it will need the export market to heat up. Both of these issues have been balancing grains futures in either direction, said AgResource.

More Aid Coming: The USDA released details Tuesday of how $16 billion in aid for farmers struggling from the fallout of the coronavirus pandemic will be apportioned--with the FSA accepting applications for aid from farmers beginning May 26. According to the USDA, producers of non-specialty crops like corn and soybeans will be paid based on inventory subject to price risk held as of Jan. 15, 2020 which is 50% of a producer's total production in 2019 or their inventory of old crop--whichever is smaller--multiplied by the commodity's applicable payment rates. "These payments will help keep farmers afloat while market demand returns as our nation reopens and recovers," said Agriculture Secretary Sonny Perdue.

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 cold storage report at 3 p.m. ET Thursday.