By Kirk Maltais


--Corn for July delivery rose 0.6%, to $5.90 3/4 a bushel, on the Chicago Board of Trade on Thursday, rising as traders rebalanced their holdings to mitigate risk ahead of the long weekend.

--Soybeans for July delivery were virtually unchanged at $13.24 a bushel.

--Wheat for July delivery fell 0.3%, to $6.04 1/4 a bushel.


HIGHLIGHTS


Prep Work: Much of the day was spent by grain traders getting their positions in order ahead of the long holiday weekend. The main risk factors heading into the weekend are developments in the ongoing debt ceiling wrangling in Washington, and overall dry weather expected throughout much of the U.S. Corn Belt over the weekend. "CBOT Ag market volatility looks to remain high," said AgResource in a note. "The bearishness of the May WASDE has been fully digested."

The Big Picture: Tension surrounding debt ceiling talks are being felt in all corners of the markets. Leaders are hoping to pass a deal ahead of a deadline next week when the government could run short of funds to pay all of its bills on time. "Those negotiations will likely dictate direction in the financial markets until an agreement between the House and the President are reached," said Tomm Pfitzenmaier of Summit Commodity Brokerage in a note.


INSIGHT


Turning Off the Tap: Although many areas of the U.S. Corn Belt have experienced ideal growing weather, others are having their driest April to May since 1992, according to a note from Jon Stewart and Associates. The U.S. Drought Monitor's most-recent outlook shows that a majority of Kansas is covered in either an exceptional or extreme drought, which is why wheat conditions there are overwhelmingly negative. Nebraska, Oklahoma, and Texas are also struggling with areas of heavy drought. Areas of the Midwest are expected to be met with a cold front next week, allowing more rain to fall in overall parched areas.

Finding the High: The average rate to rent an acre of farmland in Iowa has jumped to its highest ever, said research from Iowa State University. Iowa State reports that the average rental rate has risen 9% this year, to an average of $279 an acre. That beats the previous record set in 2013 of $270 an acre, and continues the trend of higher rents starting in 2020. Much of this increase appears to have happened early last year, with farmland values increasing by only 0.8% from September 2022 to March 2023, according to Iowa State.

What the Future Holds: Ethanol producer Rex American Resources, which operates six ethanol plants in the U.S., said in an earnings call today that high corn prices have been an obstacle standing in the way of maximizing profits. Company officials said that the company is paying a significant premium on buying corn for its plants' production, roughly 65 cents to 90 cents a bushel over CBOT prices. However, with the USDA projecting corn production of over 15 billion bushels for the 2023/24 marketing year, Rex sees the potential for prices to ease.


AHEAD


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

--The USDA will be closed in observance of Memorial Day, reopening on Tuesday.

--The USDA will release its weekly grains export inspections report at 11 a.m. ET Tuesday.

--The USDA will release its weekly crop progress report at 4 p.m. ET Tuesday.


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


(END) Dow Jones Newswires

05-25-23 1554ET