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GRAIN MARKETS: Crops tumble as rain moves in

Selling drives spring wheat back from contract highs.

Corn’s tumble today wiped out three days of gains, as forecasts put rain in the Midwest this week that should cure crops that are in need of water.

Soybeans and wheat also finished lower for similar reasons, with storms likely to help spring wheat in the northern Plains.

Outside markets were largely uneventful, with equities a little lower following more selling in the technology sector. The dollar was lower and on track to end three days of gains. Gold was lower, and crude oil was higher.

Export highlights (from the U.S. Department of Agriculture and Reuters):

- Weekly export inspections million bu. (estimate, previous week): corn 41 (35-49, 46.3), soybeans 18.7 (9-12, 10.5), wheat 28.4 (16-22, 19.3).

- Unknown destinations bought 5.1 million bu. 2016-17 corn, USDA said on Monday.

- Saudi Arabia bought 805,000 metric tons of optional-origin hard wheat for August-October arrival. Possible origins include North and South America, Europe and Australia. The average price was $216.66 per ton, c&f.

-Egypt bought 240,000 metric tons of Russian wheat and 120,000 of Romanian wheat on Saturday for July shipment. No U.S. wheat was offered.

- Iraq is believed to have cancelled its tender to buy 50,000 metric tons of wheat from the U.S., Canada or Australia, according to European traders. From the U.S., Iraq sought hard red spring, dark northern spring or hard red winter.

- Jordan seeks to buy 100,000 metric tons of optional-origin milling wheat. The tender closes June 13.

- Taiwan flour millers seek to buy 92,400 metric tons of U.S. wheat for late July and August shipment. The tender closes June 13.

- A group of private Israeli buyers seek 85,000 metric tons of corn, 30,000 of feed wheat and 20,000 of feed barley. Sourcing is optional origin. Shipping dates were adjustable. Offers are due on Tuesday.

Corn’s lower close ended six straight higher days. The futures still finished above key moving averages, but the 100-day moving average is not far under at about $3.75/bu.

While the wet forecast was the catalyst for the selling, it had some help from hedge sales following active farmer selling last week. Most of the cash sales were old crop, but a number of dealers reported new-crop sales.

The seven-day and 6- to 10-day forecasts are wet for the Midwest, plus severe storms are expected today and Tuesday in Iowa.

The selling followed Friday’s USDA report, which was mildly bearish. USDA left 2016-17 corn ending stocks unchanged for this year and next year, while traders, on average, expected reductions in both.

The Chicago Board of Trade (CBOT) estimated Monday’s volume at 666,923. Friday’s actual volume was 531,752. Open interest in Friday’s higher market was up 10,471, with July’s down 34,157 and December’s up 10,848.

July corn closed down 10-1/2 cents at $3.77-1/4 and new-crop December down 10-1/2 cents at $3.95-1/2.

What to Look For: Corn ratings will be updated late on Monday, with the trade expecting 67-68% in good/excellent condition, which would be unchanged to down a point.

Soybeans also closed with double-digit losses as the wet forecasts weighed on markets.

There was some farmer selling of soybeans after last week’s gains, but dealers said most of the selling involved corn.

On Friday, USDA raised this year’s ending stocks by 15 million bu. to 450 million bu. by lowering the crush the same amount. That increase led to a similar increase in next year’s beginning stocks and that year’s ending stocks the same amount.

CBOT estimated Monday’s volume at 198,370. Friday’s actual volume was 246,465. Friday’s open interest in the higher market down 4,078, with July’s down 18,790 and November’s up 11,744.

July soybeans closed down 10-1/4 cents at $9.31-1/4 and August down 10 cents at $9.35. New-crop November also dropped 10 cents to $9.38-1/4.

What to Look For: The crop’s first condition rating of the season comes out later Monday, and the trade expects about 68-70% good/excellent.

Wheat markets moved lower with corn and soybeans, with soft red winter wheat down the most. July soft red winter wheat closed under a few key moving averages but held above the 20-day’s $4.32/bu.

Spring wheat should benefit from rain early this week in the northern Plains. Maps have storms moving through the northern Plains today and Tuesday.

After the close, Reuters said Egypt is back in the market to buy wheat after completing its last purchase on Saturday. The latest tender is for an undetermined about of wheat for July 15-25 shipment. Results are expected on Tuesday. No U.S. wheat was offered in the previous tender.

CBOT estimated Monday’s volume at 182,648. Friday’s actual volume was 217,167. Open interest in Friday’s lower market decreased by 9,656, with July’s down 20,366 and September’s up 8,162.

Chicago, Ill., July soft red winter wheat closed down 11-3/4 cents at $4.34 and September down 11-1/2 cents at $4.48-1/2. Kansas City, Mo., July hard red winter wheat dropped 8-3/4 cents to $4.42-3/4 and September fell 8-3/4 cents to $4.60-1/2. Spring wheat for July dropped 6 cents to $6.00-1/2, and September dropped 4-3/4 cents to $6.06-1/4.

What to Look For: Crop ratings due later Monday are expected to put spring wheat at about 52-53% good/excellent and winter wheat at 20% harvested.

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