By Kirk Maltais
-- Soybeans for May delivery rose 1.3% to $15.80 a bushel on the Chicago Board of Trade Tuesday, with traders adding a weather premium to soybeans as dryness and heat look to damage freshly planted crops.
-- Wheat for May delivery rose 0.7% to $6.85 a bushel.
-- Corn for May delivery rose 0.1% to $6.80 a bushel.
HIGHLIGHTS
Reaching for Raindrops: Soybean futures led the most-active CBOT contracts higher Tuesday, driven by expectations that dry weather will continue to impact the nascent soybean crop, something that already-tight balance sheets for soybean supplies and demand can't afford.
"Next week is pretty dry, then in the last week of June there is a cold front due before July heats up again, according to the pundits, so we are effectively counting raindrops from this week's event," said Charlie Sernatinger of ED&F Man Capital.
WASDE Countdown: The USDA's crop progress released after the market's close Monday was supportive for crop futures across the board Tuesday. Seventy-two percent of the U.S. corn crop is in good-to-excellent condition, down from 76% last week, the USDA says.
Meanwhile, the agency's initial read of soybean crop quality puts it at 67% good or excellent, down from 72% at this time last year, and wheat conditions at only 38% of spring wheat in good-or-excellent condition, down from 43% last week and 82% at this time last year.
"Now that the report is out of the way, trade will focus more on positioning ahead of Thursday's WASDE report," said Karl Setzer of AgriVisor.
INSIGHTS
Forward Focus: Future weather forecasts look to be the key area of focus for grain traders over the next few weeks.
"The market has no choice but to add premium on a daily basis until a needed lasting pattern of rainfall is established," said AgResource. "Weather concern stays elevated."
With Monday's crop conditions report showing a worsening of conditions across the board for U.S. crops, traders think they could get even more severe and squeeze an already-tentative supply situation.
Above-normal temperatures and isolated showers are expected in growing areas, DTN said Tuesday.
Climbing Production: Daily production of U.S. ethanol is expected to continue to rise this week, according to analysts surveyed by Dow Jones. They forecast the EIA will report Wednesday that daily production is anywhere between 1.029 million barrels per day and 1.047 million barrels per day. Unless the actual production comes in at the low end of analyst estimates, that will be up from last week's 1.034 million barrels per day.
Analysts are unsure what direction stockpiles will move, forecasting a range of 19.29 million barrels and 19.84 million barrels versus 19.59 million barrels reported last week.
AHEAD
-- The EIA is scheduled to release its weekly ethanol production and stocks report at 10:30 a.m. EDT Wednesday.
-- The USDA is due to release its weekly export sales report at 8:30 a.m. EDT Thursday.
-- The USDA is scheduled to release its monthly world supply and demand report at noon EDT Thursday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
06-08-21 1545ET
