By Kirk Maltais

--Soybeans for July delivery rose 1.8% to $15.71 1/2 a bushel, its highest close since October 2012, on the Chicago Board of Trade Thursday. Dry conditions in North and South America squeezed supply amid robust demand.

--Corn for July delivery rose 1.6% to $7.20 a bushel, its highest close since March 2013.

--Wheat for July delivery rose 1.5% to $7.55 1/4 a bushel, its highest close since February 2013.

HIGHLIGHTS

Not Enough: While rainfall is expected throughout much of the U.S. Midwest this weekend, the northern plains is only expected to receive moderate rainfall, said DTN. That's bad news considering the already existing dryness of the area. This was a factor pushing grains higher across the board. "Soil moisture and drought concern are building in this portion of the Midwest," said DTN. Additionally, cold temperatures expected this weekend carries the risk of frost -- "unfavorable for row crop progress" according to DTN. Drought conditions in Brazil also lifted grain futures trading Thursday.

Supply Squeeze: Soybean futures led grains higher Thursday. A tight supply globally and robust demand is supportting futures as they charge toward all-time highs. "The market is trending higher with the trade mostly orderly," said Doug Bergman of RCM Alternatives. "With the U.S. on pace to deplete bean supplies this summer along with the fact the U.S. is not set up to import meaningful quantities of beans suggests the bean market is headed for more volatility and higher prices in the coming months."

INSIGHTS

Who's Got the Oil?: The strong demand story surrounding soybean oil also provided a lift for soybean futures Thursday, and may keep providing them with support. "The edible oil markets remain hot amidst enthusiasm over the next generation of fuels, called renewable fuels," said Arlan Suderman of StoneX. "The edible oil markets breathed new life into the soybean market today, pushing new-crop contracts to new highs for this bull market, while the nearby contracts remain just below recent eight-year highs." Tight supply of soybean oil is expected to continue well into next year, according to the United Soybean Board.

Below Expectations: Export sales of U.S. corn were far weaker than expected by traders, amid a large reduction in sales for the 2020/21 marketing year. While not creating a lasting impact on corn futures trading today, the slim tonnage may be a sign that demand rationing has started. For the 2020/21 and 2021/22 marketing years, corn sales totaled 243,600 metric tons for the week ended April 29. The primary driver for the low figure is a cancellation of 559,100 tons that were previously booked for delivery in the 2020/21 marketing year for unknown destinations. Grains traders surveyed by The Wall Street Journal had forecast sales to total anywhere from 550,000 tons to 1.2 million tons.

Domestic Slide: Shipments of U.S. grains fell slightly off from the previous week, according to the USDA. In its Grains Transportation Report published Thursday, the USDA says that U.S. Class I railroads originated 25,467 grain carloads for the week ended April 24 -- down 3% from the previous week but up 18% from the same time last year. Meanwhile, barge grain movements for the week ended May 1 totaled 671,536 tons, down 30% from last week but 1% higher than last year. Grain futures have been rallying in recent weeks, with row crop futures near all-time highs.

AHEAD:

--The CFTC will release its weekly commitment of traders report at 3:30 p.m. ET Friday.

--Tyson Foods Inc. will release first-quarter earnings before the stock market opens Monday.

--The USDA will release its weekly export inspections report at 11 a.m. ET Monday.

--The USDA will release its weekly crop progress report at 4 p.m. ET Monday.

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

(END) Dow Jones Newswires

May 06, 2021 15:11 ET (19:11 GMT)