By Kirk Maltais


--Wheat for July delivery fell 1.8% to $6.80 1/2 a bushel, on the Chicago Board of Trade on Thursday, as drought-stricken Russia is expected to receive more rain.

--Corn for July delivery fell 1.5% to $4.48 1/2 a bushel.

--Soybeans for July delivery fell 0.3% to $12.10 1/2 a bushel.


HIGHLIGHTS


Precipitation Push: Changing Russian weather forecasts calling for more rain in otherwise parched wheat-growing areas are putting pressure on CBOT wheat premarket, Matt Zeller of StoneX said in a note. Zeller said that these improved rainfall totals are expected over the next 10 days, but added that some firms don't see the rainfall as a panacea for Russia's winter wheat crop. Damage due to cold and drought have been factors supporting world wheat prices in recent weeks, with CBOT wheat responding to price jumps in Europe and elsewhere.

Crowded Out: A report from Reuters said that little to no ethanol will qualify for the U.S. aviation fuel credit, pressuring corn today. The pilot program under the Biden Administration toughened the climate requirements for biofuels used for sustainable aviation fuel, also known as SAF, requiring farmers to use three different climate-friendly farming practices, which is uncommon to find among U.S. corn farmers. "The issue could hurt the biofuel industry, which sees SAF as ethanol's best chance at growth since electric cars have cut into its market," John Stewart and Associates said in a note.

Closing Out May: With the end of the month coming tomorrow, traders are preparing for June, and U.S. crops are generally looking good. "The tone of the market is bearish on favorable Central U.S. weather," AgResource said in a note. The firm adds that much of the activity undertaken by traders has been profit-taking, estimating that managed money traders have sold 6,200 contracts of corn, 4,600 contracts of wheat, and 3,400 contracts of soybeans.


INSIGHT


Import Export Imbalance: Tensions with China, which is dealing with economic issues of its own, and the strength of the U.S. dollar are fueling a trade imbalance for the U.S. when it comes to agricultural goods. A report from the USDA's Economic Research Service showed that for the 2024 fiscal year ag imports have risen to $202.5 billion, reflecting high shipments of livestock and dairy, among others. Exports are seen at $170.5 billion, unchanged from the agency's previous forecast in February.

Slowly Sliding: The amount of U.S. grain being shipped by rail has been on a steady decline for nearly two months, according to data from the Surface Transportation Board compiled by the USDA. According to the data, much of this drop-off can be attributed to declining activity on Canadian National, which has been bracing for a strike. CN grain carloads are down 36% from this time last year. Struggling U.S. export demand is also hitting shipments, particularly for soybeans and wheat. The government says that the amount of grain moving on the rail system for the four-weeks ended May 18 was down 1% from the previous week, but down 11% from the three-year average for this time of year.

Driving Season Begins: Average daily ethanol production in the U.S. jumped from the previous week, exceeding the outlook of analysts surveyed by The Wall Street Journal as the summer driving season begins. The EIA said that for the week ended May 24, daily ethanol production averaged 1.068 million barrels a day, up from 1.019 million barrels a day last week, and well beyond the range forecast by analysts. Inventories dropped more than expected by analysts with the EIA reporting ethanol stocks at 23.21 million barrels, the lowest since December.


AHEAD


--The USDA will release its weekly export sales report at 8:30 a.m. ET Friday.

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

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

--The USDA will release its monthly Grain Crushings report at 3 p.m. ET Monday.

--The USDA will release its weekly Crop Progress report at 4 p.m. ET Monday.


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

(END) Dow Jones Newswires

05-30-24 1615ET