By Kirk Maltais


-- Soybeans for November delivery fell 4.3% to $14.06 a bushel on the Chicago Board of Trade Monday in response to both the first Ukrainian grain shipment leaving Odessa and Nancy Pelosi's visit to Taiwan sparking threats of retaliation from China.

-- Corn for December delivery fell 1.7% to $6.09 3/4 a bushel.

-- Wheat for September delivery fell 0.9% to $8.00 1/4 a bushel.


HIGHLIGHTS


Rising Tension: Moderated weather forecasts and reduced risk premium stemming from the first vessel to leave Odessa carrying a grain shipment since the start of Russia's invasion of Ukraine pressed grains as a whole this morning.

Also weighing on the complex was apprehension around U.S. House Speaker Nancy Pelosi's planned visit to Taiwan, which is expected to happen despite warnings by China of retaliation.

"There are new concerns about a possible row with China if Nancy Pelosi does in fact visit Taiwan," Sterling Smith of AgriSompo told the WSJ.


Pressure Point: The Ukraine grain shipment contains 26,000 metric tons of corn, according to The Wall Street Journal, and is headed for Lebanon.

"If this corridor proves even reasonably successful it will go a long way to alleviating shortages of grains across Europe, the Middle East, Africa and Asia," said Michael Magdovitz of Rabobank. "Greater Odessa ports have around 600,000 tons of grains ready to ship in 16 vessels -- nearly 50% of its monthly land-route exports since the beginning of the war."


Oil Spill: Also weighing on soybeans was a drop-off in soybean oil futures.

"Soybean oil is seeing a correction which is pressuring soybeans," said Terry Reilly of Futures International in a note, adding that fund traders are also exiting from positions in soymeal.

Before Monday's selling, soyoil had been on the rise for four consecutive sessions, gaining over 14% in that time. The most-active soyoil contract closed down 3.7%.


INSIGHTS


Alternative Sourcing: House Speaker Pelosi's proposed Taiwan visit could add to friction to U.S.-China trade relations.

"Fears of reduced trade and worsening political tensions abound," said AgResource in a note. "China has been largely absent from U.S. soybean purchases for weeks and is securing as much as possible from Brazil for August and September."

However, China was listed as one of the leading destinations for U.S. soybean shipments in the USDA's most recent grain export inspections report, being the recipient of over 130,000 metric tons of soybeans for the week ended July 28.


Weather Fixation: The grain markets took some profits this morning after a solid week of gains, said Matt Zeller of StoneX in a note.

Traders say that seasonal movement of grains is typically lower at this time of the year, but dry weather still could derail both corn and soybean crops in a year where supplies are already tight.


AHEAD


-- The EIA is scheduled to release its weekly ethanol production and stocks report at 10:30 a.m. EDT Wednesday.

-- Zoetis Inc. is due to release its second-quarter earnings report before the stock market opens Thursday.

-- The USDA is scheduled to release its weekly export sales report at 8:30 a.m. EDT Thursday.

-- Beyond Meat Inc. is due to release its second-quarter earnings report after the stock market closes Thursday.

-- Corteva Inc. is scheduled to release its second-quarter earnings report after the stock market closes Thursday.


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


(END) Dow Jones Newswires

08-01-22 1601ET