By Kirk Maltais
--Corn for December delivery rose 2.4% to $5.65 3/4 a bushel, on the Chicago Board of Trade Tuesday in reaction to an only marginal improvement in the quality of U.S. crops and more hot weather ahead.
--Soybeans for November delivery rose 1.2% to $13.88 1/2 a bushel.
--Wheat for September delivery rose 0.4% to $7.00 1/2 a bushel.
HIGHLIGHTS
Marginal Move: Yesterday's crop progress report from the USDA showed only minor improvements to corn and soybean crop quality from the previous week. The amount of corn in good or excellent condition was unchanged from last week at 65% and soybeans up 1 point to 60%. However, wheat fell 5 points to 11%, and with a new spate of dryness descending on growing regions all three ratings may get worse next week. "The next 4-6 weeks of Central U.S. weather is critical for 2021 U.S. corn and soybean yield potential," said AgResource.
Hold on the Panic: The concerns of grains traders that the spread of the Delta variant of Covid-19 could lead to renewed shutdowns and another roadblock in the recovery of the U.S. economy appear to have subsided today. "I doubt the U.S. shuts down since 70% of the population over 50 years old is vaccinated," said Craig Turner of Daniels Trading. "Unfortunately other nations around the world have lower vaccination rates and that could lead to shutdowns overseas." Grains traders will continue to react to new developments concerning Covid, as they will with the weather, Mr. Turner said.
INSIGHTS
Heat Wave: Above-normal temperatures are in store for U.S. crop-growing areas over the next 10 days, with only scattered rainfall across the board, according to DTN. For the Northern Plains, where drought conditions have increasingly hurt the growth of row crops, scattered rainfall is expected along with temperatures seen as "above to well-above" normal. With this week's crop conditions report only moving conditions marginally higher on increased rainfall, grains traders will be watching to see how much rain these systems deliver to parched areas.
Finding Balance: While yesterday's crop quality report from the USDA showed less of an improvement to ratings than expected by grains traders, the question remains if good weather in eastern growing areas will offset the drought conditions seen in the Northern Plains. "This week's crop ratings tell us that the bad of the northwestern belt is nearly all offset by the good in southern and eastern areas of the belt," said Arlan Suderman of StoneX. "Yields in the northwestern belt will no doubt drop over the next few weeks if the current weather forecast verifies. The question is, how far south and east will the heat and dryness spread?"
Whittling Down: Inventories of ethanol in the U.S. are expected to drop in the EIA's report tomorrow, according to analysts surveyed by Dow Jones. Analysts project that stocks will total anywhere from 20.1 million barrels to 21.2 million barrels, versus the total of 21.1 million barrels reported by the EIA last week. Production, meanwhile, is expected to rise - with analysts projecting it as high as 1.06 million barrels per day, up from 1.04 million barrels last week.
AHEAD:
--The EIA will release its weekly ethanol production and stocks report at 10:30 a.m. ET Wednesday.
--The USDA will release its annual agricultural chemical usage report at 3 p.m. ET Wednesday.
--The USDA will release its weekly export sales report at 8:30 a.m. ET Thursday.
--The USDA will release its monthly cold storage report at 3 p.m. ET Thursday.
--The USDA will release its monthly livestock slaughter report at 3 p.m. ET Thursday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
07-20-21 1455ET
