Wheat markets closed higher after an up-and-down journey that involved early contract highs, losses near midday and then a late recovery that put all three markets mostly higher for the day.

Corn and soybeans closed higher with soybeans peaking at their highest since March. Worries about hot, dry conditions in the northern Plains that could hurt spring wheat and fall-harvested crops kept support in the market. Also there was lingering support from USDA’s acreage report that had few soybean acres than were expected.

Weather forecasts have storms in Iowa and northern Illinois on Thursday, but only light showers elsewhere in the Midwest. The late-planted crops could use rain, while the hot weather may put early-planted corn, which will be pollinating soon, at risk.

The 6- to 10-day outlook (July 10-14) is hot and dry for the western Midwest and northern Plains. The 8- to 14-day outlook (July 12-19) is hot for everywhere except the Southeast  and is dry for the Plains and western Midwest.

Equities were lower when the crops closed, with the Dow Jones industrials down about 13 points as lower crude oil prices pulled energy shares down. Crude oil was down nearly $2 a barrel. The dollar stayed higher even as future rate hikes were doubted following the Fed Reserve minutes that showed some concerns inflation has been slow to gain traction.

Exports – USDA, Reuters:

-       Algeria bought about 420,000 metric tons of optional-origin milling wheat, traders said. The wheat is for September shipment.

-       Egypt bought 410,000 metric tons of wheat, split between Russia and Romania supplies, for Aug 5-15 shipment. U.S. wheat was not offered.

-       Iraq seeks to buy 50,000 metric tons of hard wheat from the U.S., Canada or Australia. The tender closes July 3 with offers valid until July 9. Shipment details were not published.

-       Bangladesh is in the market for 50,000 metric tons of wheat. The tender closes July 11, with shipment 40 days after deals are signed.

-       Jordan seeks to buy 100,000 metric tons of optional-origin hard milling wheat. No shipment was reported. The tender closes July 13.

Corn finished at a three-week high and got support from the other crops. The active September settled well above key moving averages with a 61 RSI.

The recent gains prompted farmer selling of old-crop supplies. New-crop December is more than $4, often a trigger point for selling, but grain dealers said farmers are waiting for more gains in the market.

After the close, USDA said 452.4 million bushels of corn went to ethanol plants in May versus 425.7 million a year ago. Farm Futures expected 459 million.

Farm Futures expects a 66% good/excellent rating for corn in this afternoon’s crop progress data. A week ago, corn was at 67%.

The pending hot weather could be a problem for corn nearing pollination. Grain merchants in Iowa and central Illinois said the crop could use rain. Recent showers missed large swaths of Iowa and central Illinois and southern Illinois.

The CBOT estimated Wednesday’s volume at 473,990. Monday’s actual volume was 494,384. Open interest in Monday’s market was up 5,910 with July’s down 2,575, September’s up 2,630 and December’s down 408.

July corn closed up 3-3/4 at $3.81-3/4, September up 3-1/2 at $3.92 and new-crop December up 4-3/4 at $4.04.

What to Look For: Talk of hot, dry weather is making the rounds at a time when corn will be pollinating soon. Dealers report a big disparity in corn maturity with early-planted fields tasseling or close to it, while late-planted or replanted fields are several weeks away from that stage.

Soybeans settled higher for the seventh straight session and the highest since March with the August above most key moving averages. An RSI of almost 71 puts it in overbought territory on technical charts.

Despite the higher futures, grain dealers said farmers have been slow sellers of old- or new-crop supplies.

After the close, USDA said 157 million bushels of soybeans were processed in May compared with 161 million a year ago. Farm Futures expected 158.7 million.

Farm Futures expects USDA later today to keep the crop’s condition rating at 66% good/excellent

Last week’s USDA soybean acreage of 89.5 million was a record but was on the low end of trade estimates. Increases were seen throughout the Midwest and the Southeast plus in the traditional wheat states of Kansas, North and South Dakota, and Oklahoma.

The CBOT estimated Wednesday’s volume at 331,676. Monday’s actual volume was 365,567. Monday’s open interest in the higher market dropped by 243 with July’s down 1,014, August’s down 1,234 and November’s down 8,789.

July soybeans closed up 11-1/2 at $9.76-1/4 and August up11-3/4 at $9.81-3/4. New-crop November rose 13-1/2 to $9.94-1/2.

What to Look For – Forecasts are turning hot and that may have funds anxious to exit short positions.

Hard red winter wheat had the best gains of the wheat markets after being lower earlier in the day. Funds last week added to their net long positions in HRW and spring wheat and trimmed their net short in SRW. 

Contract highs were set in all spring wheat months and in the most of the HRW and SRW months. Farm Futures expects USDA later today to keep winter wheat at 49% good/excellent and keep spring wheat at 40%.

The smaller-than-expected acreage in USDA’s report added to the bullish mood created by the drought conditions in the northern Plains. Fewer wheat acres in Canada and concerns about hot, dry weather affecting European production have given wheat markets an added boost.

The CBOT estimated Wednesday’s SRW volume at 313,004. Monday’s actual volume was 245,678. Open interest in Monday’s higher SRW market increased by 4,395 with July’s down 798 and September’s up 844.

Chicago’s July SRW wheat closed up 2-1/2 at $5.39-1/4 and September up 5 at $5.60. Kansas City’s July hard red winter wheat rose 10 to $5.51-1/4 and September rose 10 to $5.69-1/2. Spring wheat for July dropped 1-1/2 to  $8.10-1/2 while September rose 3-3/4 to $8.19-3/4.

What to Look For – It will be about a month before harvesters enter spring wheat fields in the northern Plains, which until then will have the markets having to estimate the size of that drought-hit crop.