Wheat Futures Sink on Improving Crop Health — Daily Grain Highlights

By Kirk Maltais

• Wheat for July delivery fell 2.3% to $5.41 3/4 a bushel on the Chicago Board of Trade on Monday, as wheat-growing areas globally received weather that was good to improve world wheat health.
• Corn for July delivery fell 2.2% to $4.33 1/4 a bushel.
• Soybeans for July delivery fell 0.1% to $10.55 3/4 a bushel.

HIGHLIGHTS

Here and Abroad: CBOT wheat futures were down all day, with the conditions of global crops looking better than they have in previous years. U.S. crops have been receiving sufficient rainfall to bolster crop health, and France's Agricultural Ministry said the country's soft wheat crop is in 69% good or excellent condition - below the same time last week but above where it was at this time last year. "Recent rains, declining temperatures, and storms in the various growing regions across the nation are favoring wheat crop development," said ING Economics in a note.

On This Side: This week's Crop Progress report from the USDA is expected to show the U.S. corn crop essentially wrapping up planting by farmers, with soybeans not far behind. That's because sufficient rainfall in most growing areas is keeping crop stress minimal heading into the summer growing season. "Most of the Midwest has seen adequate or greater precipitation and it is still too wet in the eastern and southern parts," said Jack Scoville of Price Futures Group in a note. A waterlogged crop typically stifles production, but warmer and drier weather is forecast this week.

Due Date: There's now one month left in the pause of President Trump's reciprocal tariffs, with it scheduled to end July 9. But markets appear unmoved by the impending due date. "While market participants are clearly taking a glass half-full view of the outlook, both on trade policy and more broadly, we don't think that should be interpreted as a view that tariffs will be fully unwound," said Capital Economics in a note. Reluctance to re-enter tariff-related economic turmoil is noted by analysts, but many remain doubtful that a host of individual trade deals will be announced. This means that how trade policy looks this time next month is still an open question.

INSIGHT

Retaining Size: This week's WASDE report is expected to show only a small reduction in the amount of corn and soybeans being produced by U.S. fields this year. Analysts surveyed by WSJ say they expect corn production at 15.79 billion bushels, down roughly 25 million bushels from the prior month's projections. Soybean production is expected to fall just 2 million bushels, to 4.34 billion bushels. Meanwhile, analysts forecast an uptick of 2 million bushels in U.S. wheat production, to 1.92 billion bushels. Winter wheat production is driving that rise, up 4 million bushels to 1.39 billion bushels. The monthly report is scheduled to be published Thursday.

Hopes for a Resolution: The American Farm Bureau Federation implores its counterparts in the UK to push the government there to finalize a new trade agreement. AFBF head Zippy Duvall said in a note that he's held meetings with UK agricultural officials about getting a trade agreement to the finish line - with the AFBF seeing the current deal as one that would greatly benefit U.S. agriculture. "[We urge] leaders in both countries to finalize the deal, which expands American ethanol exports and other agricultural products," said the AFBF.

Directional Choice: The net position for fund traders in corn and soybeans grew shorter, according to the CFTC's Commitment of Traders report Friday. Fund traders added nearly 43,000 short contracts of corn for the week ended June 3, and over 18,000 short positions in soybeans. This brings the net short in corn to just over 154,000 contracts, while a net long in soybeans slims to just over 8,600 contracts. "The COT report wasn't too surprising for the week, but funds now hold their most bearish collective position since early Sep. '24 and the most bearish position to start June in 8 years," said John Stewart and Associates in a note.

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 WASDE report at noon ET Thursday.

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