By Kirk Maltais

--Soybeans for November delivery fell 1.2% to $13.75 3/4 a bushel on the Chicago Board of Trade Monday amid fears that a resurgence in Covid-19 cases may stifle a post-pandemic economic recovery.

--Corn for December delivery rose 0.1% to 5.52 1/2 a bushel.

--Wheat for September delivery rose 1.2% at $7.00 3/4 a bushel.

HIGHLIGHTS

Mood Killer: Although the weather outlook for U.S. growing areas looks to be dry, CBOT grain futures were mixed Monday on worries of surging coronavirus cases globally sending markets lower across the board. "Were it not for the weather outlook concerns in the grain and soy trade that have spurred on a higher opening this week; these markets could very well be suffering that same Delta Covid concerns as many others," said Dan Hueber of the Hueber Report. "It does appear to have dampened some of the overnight enthusiasm."

Dry Dirt: The main source of support for grain futures today was the outlook that soil moisture in U.S. growing areas is expected to decline this week, with higher temperatures fueling drying from rainfall seen over the weekend in some areas. "Drying will be accelerated in the northern US Plains and western Corn Belt this week and probably into early next week as well," said Terry Reilly of Futures International. "Temperatures will be quite warm to hot helping to accelerate the decrease in soil moisture and increase in crop moisture stress." However, grains traders say that many areas may have received enough rain to withstand the dry period - although other areas like the drought-stricken Northern Plains may just get worse.

Bouncing Back: Breaking ranks with corn and soybeans was wheat today, with a rebound seen in CBOT wheat futures this month continuing. In the previous five trading sessions, wheat has jumped roughly 14%. "The wheat price in Chicago this morning is continuing the upswing it has been enjoying in recent days," said Commerzbank. "This is due to concerns about crops in Russia and the U.S. being lower than hoped on account of unfavourable weather." Also supporting higher prices this morning is confirmation from the USDA Friday of Chinese purchasing of U.S. wheat exports.

INSIGHTS

Bottom Line: The volatility seen in grains futures in 2021 -- with prices finding near-record highs in May before slipping and entering a choppy pattern -- is being felt by companies reliant on these prices. In its fiscal fourth quarter earnings reported today, egg producer Cal-Maine Foods Inc. said that prices for feed provided pressure on earnings along with lesser demand for eggs as consumers slowly return to post-Covid pandemic life. "Increased export demand for both soybeans and corn, as well as weather-related shortfalls in production and yields, have placed additional pressure on domestic supplies, resulting in higher and more volatile prices," said Cal-Maine chief executive Dolph Baker.

Nurturing Hope: This afternoon's crop progress report from the USDA is expected to show improvements to the condition of U.S. row crops, thanks to a spat of rainfall in the past week. Even so, how much these ratings improve will not be enough to bring these ratings within normal levels, said Arlan Suderman of StoneX. "The improvement is counter-seasonal, and it is based largely on the crops responding to last week's much-needed rains in the west, and the beginning of persistently wet conditions starting to moderate in the east," said Mr. Suderman. "The question is, where do we go from here in a year when tight global supplies necessitate 'normal' crops from the United States."

Trending Lower: Export inspections for U.S. corn and soybeans fell slightly from the previous week, according to USDA data. In the USDA's weekly grain export inspection report released Monday, the agency says that corn export inspections this week totaled 1 million metric tons for the week ended July 15, down from 1.002 million tons last week. Meanwhile, soybean inspections totaled 143,934 tons, down from 201,129 tons last week. China was a key destination for U.S. corn for the week, being the destination for 459,696 tons. The nation was also the destination for 62,974 tons of wheat for the week. Wheat inspections were higher from the previous week - totaling 490,626 tons, up from 427,819 tons previously.

AHEAD:

-Canadian National Railway is releasing its second-quarter earnings report after the stock market closes Tuesday.

-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. Wednesday.

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

(END) Dow Jones Newswires

07-19-21 1534ET