By Kirk Maltais


--Wheat for December delivery fell 1.7%, to $5.66 1/2 a bushel, on the Chicago Board of Trade on Monday, after South American growing areas received rain over the weekend.

--Soybeans for January delivery fell 0.9%, to $13.08 1/2 a bushel.

--Corn for December delivery fell 0.5%, to $4.78 3/4 a bushel.


HIGHLIGHTS


Turning on the Faucet: Rainfall came to South American growing areas over the weekend, which hit CBOT grains throughout the day. Rainfall in parched areas of Brazil and Argentina are expected to quell any drought issues the nascent crop may be struggling with, which in turn may allow these countries to field bumper crops dragging export prices lower.

Product Fallout: CBOT soymeal futures turned lower, weighing on the underlying soybean contract. "Soybean meal is grossly overbought, with RSI in the Dec. contract highest in about a year while fund length doubled over past week," said Joel Karlin of Ocean State Research. The improving weather forecasts in South America, where young crops are attempting to establish themselves amid dry conditions, also impacted the soy complex.


INSIGHT


End of the Line: If Monday's Crop Progress report from the USDA shows that corn and soybean harvests are nearly complete for the year, then futures may soon begin to rally, said AgResource in a note. The firm says bulls believe higher prices are needed to pull supply from farmers. Traders and analysts have said that U.S. farmers have been reluctant to sell their supplies in recent months, based on the notion that they were holding out for better prices.

Cautious Optimism: The USDA will release its first estimates for the crop condition of U.S. winter wheat in its latest Crop Progress report this afternoon. These conditions are expected to be somewhat favorable, said Brian Hoops of Midwest Market Solutions. "I think they will be pretty decent," says Hoops, predicting that the USDA may peg the amount of good-to-excellent winter wheat at roughly 60%. This estimate comes as Russian wheat is ready to flood the export market, and crops in places like Australia appear to be improving.

Pared Risk: Grains have traded closely with crude oil in recent sessions, as markets grapple with events in the Middle East. Risk premium was only lightly added to crude oil last week, said Ritterbusch and Associates in a note, which was a let down for many traders. "Crude prices declined almost 3% last week as many speculative positions were liquidated amid disappointment that such a small amount of geopolitical risk premium was being injected into the market," said the firm. Israeli tanks and infantry have temporarily seized control of a strategic road linking the Gaza Strip's north and south, a major advance that appeared aimed at encircling the enclave's biggest population center, Gaza City.


AHEAD


--The USDA will release its monthly Agricultural Prices report at 3 p.m. ET Tuesday.

--The EIA will release its weekly ethanol production and stocks report at 10:30 a.m. ET Wednesday.

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


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


(END) Dow Jones Newswires

10-30-23 1538ET