By Kirk Maltais
--Soybeans for November delivery fell 2.9% to $14.12 1/4 a bushel on the Chicago Board of Trade Monday, in reaction to rainfall arriving to drought-stricken growing areas in the Central U.S. over the weekend and next week.
--Corn for December delivery fell 2.2% to $6.28 1/4 a bushel.
--Wheat for September delivery fell 0.7% to $8.00 3/4 a bushel.
HIGHLIGHTS
Cooling Down: Grain futures traded lower on the CBOT today, fueled largely by rainfall seen in parched areas over the weekend as well as further rainfall forecast this week. "Northern Nebraska received some much needed rain up to an inch and two inches in localized areas," said Matt Zeller of StoneX in a note. A cold front traveling through the central portion of the country is expected to drop temperatures and create more chances for precipitation, according to DTN's latest forecast.
Slowed Activity: A surprise rate cut by China's central bank in reaction to slowed economic activity is putting pressure on many commodities in trading, including grains. Additionally, rumors surfaced over the weekend that China may stop accepting commodities shipped from Australia and New Zealand, which in turn is introducing jitters when considering China's appetite for U.S. exports. "There is some chatter China may restrict imports from Australia, but bottom line if China needs to feed their people, they will buy it," said Terry Reilly of Futures International in a note. "Australia's exports of raw and finished goods exports are dependent on China, so we think a larger trade spat may be avoided."
INSIGHTS
Proof is in the Pudding: The USDA's weekly Crop Progress report, due out at 4 p.m. eastern time, is expected to show further declines in U.S. crop conditions, according to analyst estimates. Analysts are forecasting drops in conditions for corn, soybeans, and spring wheat to range anywhere from 1% to 3%, with hot and dry weather pressuring crops. Last week, the USDA said corn conditions are 58% good-to-excellent, soybean conditions are 59% good-to-excellent, and spring wheat conditions are 64% good-to-excellent. This week, weather is expected to turn wetter and milder in many growing areas, which may ease the steady decline in crop quality seen in recent weeks.
Aftermath: Over 60% of the U.S. West, Southwest, and Central Plains are facing what's characterized as "severe" drought or worse, says the American Farm Bureau Federation - which in turn is making economic conditions for farmers increasingly dire than they were at this point last year. In a survey conducted by the AFBF, 74% of respondents said that they are expecting reduced crop yields as a result of drought, up from 72% at this point last year. 42% of surveyed farmers say that they are planning on switching to different crops next year, which is up from 37% last year. Additionally, the ongoing drought is forcing many farmers to get rid of their multi-year crops, including orchards.
Drop Off: U.S. export inspections for wheat dropped this week -- while inspections for other grains stayed relatively steady, according to the latest report from the USDA. In its latest weekly grain export inspections report, the USDA said that wheat inspections for the week ended August 11 totaled 373,227 metric tons. That's down from 635,720 tons reported last week. Meanwhile, corn inspections totaled 538,406 tons for the week, only slightly lower than 555,620 tons reported in the previous week. Soybean inspections totaled 744,571 tons, down from 871,345 tons. China was a leading destination for U.S. corn and soybeans, the USDA reported. Mexico was a leading destination for U.S. wheat.
AHEAD
--The EIA will release its weekly ethanol production and stocks report at 10:30 a.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 Cattle on Feed report at 3 p.m. ET Friday.
--The CFTC will release its weekly commitment of traders report at 3:30 p.m. ET Friday.
--Deere & Co. will release its third-quarter earnings report on Friday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
08-15-22 1459ET
