By Kirk Maltais


--Soybeans for July delivery fell 1.7% to $16.52 3/4 a bushel on the Chicago Board of Trade Wednesday, following palm oil lower amid general weakness surrounding energy prices.

--Corn for July delivery fell 1.1% to $6.93 3/4 a bushel.

--Wheat for July delivery rose 0.1% to $9.76 1/2 a bushel.


HIGHLIGHTS


Pressure Point: Weakness in palm oil prices overnight pressured soybeans and soyoil today. "Palm oil futures dropped a large amount on Wednesday with Indonesia issuing export permits," said Terry Reilly of Futures International in a note. Weak Malaysian export data also put the squeeze on palm oil prices, with the country's palm oil exports falling 6.1% on month over June 1-15, according to data from cargo surveyor AmSpec.

Source of Support: Wheat closed higher after yesterday's large drop, inching back close to the $10 per bushel mark. Driving the turnaround was data from the USDA's Crop Progress report yesterday, which showed declines in winter wheat conditions in certain states - which may be a sign of lower yields in those states, said Mike Castle of StoneX. "Rains will slow progress in some areas where harvest is already underway, but the trade will continue to keep a close eye on how this harvest shakes out with its importance growing as the prospect of turning larger-scale Ukrainian wheat exports back on any time soon weakens," said Mr. Castle in a note.


INSIGHTS


No Letting Up: Russia's attack on at least two grain storage facilities in Ukraine has traders doubting that Black Sea ports will reopen for shipments anytime soon. "Bunge and Viterra report extensive damage to terminals in Mykolaiv along the Black Sea Coast, which provides further evidence that Ukrainian grain will not be shipped via the Black Sea," said AgResource in a note. "War in Ukraine rages on, particularly in the east, and odds remain near zero that any humanitarian export corridor will be created this summer." In an interview with the WSJ this week, MHP SE executive chairman Dr. John Rich said that depleted grain storage capacity in Ukraine may further hamper crop growth there next year.


Condition Slips: The condition of U.S. crops dropped slightly in the past week, according to the USDA's Crop Progress report released yesterday. Corn in good-or-excellent condition slipped two points from the previous week to 70%, while soybeans in good-or-excellent condition also fell two points to 68% good-or-excellent. Winter wheat fell one point to 30% good-or-excellent, and spring wheat rose five points to 59%. For the most part, trader focus is on the weather outlook in the coming weeks. "Attention in the market now is on weather across the United States as high temperatures, limited precipitation are being seen in many regions," said Karl Setzer of AgriVisor in a note. "Long range outlooks indicate these conditions are just temporary though and more favorable weather will set in as we move closer to July."

Bearish Signs: The recent inflow of fund money into commodities may dry up if efforts by central banks to tame runaway inflation globally via raising interest rates succeed, said Craig Turner of Daniels Trading. "If the U.S. Federal Reserve is aggressive raising interest rates for the rest of 2022, inflation will start to come down, the economy will slow down, and that is all bearish for commodities," said Mr. Turner in a note - adding that energy commodities are likely to feel this the most, with grains following them lower. In comments today, Federal Reserve chairman Jerome Powell said that it plans to raise rates until a 2% target for inflation is met.


AHEAD


--The EIA will release its weekly ethanol production and stocks report at 10:30 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

06-22-22 1557ET