By Kirk Maltais

--Wheat for July delivery rose 2.8%, to $6.10 3/4 a bushel, on the Chicago Board of Trade on Thursday, with traders anticipating that weather in crop-growing areas is turning drier, supporting a bounce in prices.

--Soybeans for July delivery rose 2.3% to $13.29 1/2 a bushel.

--Corn for July delivery fell 0.3% to $5.92 1/2 a bushel.

HIGHLIGHTS

Forecast Focus: With the start of June, grain traders appear to be shifting their attention to weather in the U.S. Corn Belt - monitoring how much rain growing areas get as the new crop begins key stages of the growing process. Futures rose on concern that the weather may trend dry as the summer progresses. "The forecast is not calling for much rain for the next week to 10 days, although there are some minor chances for popup showers every couple of days," said Tomm Pfitzenmaier of Summit Commodity Brokerage in a note.

Black Seas Tensions: For wheat in particular, re-emerging tension surrounding the Black Sea export deal was also a factor boosting prices. This morning, Ukraine claimed Russia was obstructing the inspection of vessels coming out of port cities, which is in turn keeping Ukrainian grain stuck within the country's borders.

Closing the Gap: Also providing support for grains as a whole was weakness in the U.S. dollar - with the USD index down 0.7% by the close of trading. With traders recently concerned about the competitiveness of U.S. export grains versus cheaper alternatives abroad, the weakening U.S. dollar is a welcome sight. Even so, most of the buying interest for grains today stemmed from tough forecasts in the U.S. Corn Belt.

INSIGHT

Parched Crops: Areas of extreme and exceptional drought in the U.S. Corn Belt are growing, according to the latest map from the U.S. Drought Monitor. While Texas, Oklahoma, Nebraska, and Kansas all still have these dry areas, Missouri now has an area of extreme drought at the center of the state - while the Iowa-Nebraska border also has these conditions. With the global climate shifting into an El Nino system, grain traders are concerned that these dry conditions will only get worse as the summer wears on. "[Our] concern for Central Canadian and Central U.S. weather is rising," said AgResource in a note.

Back Over the Threshold: Daily production of U.S. ethanol has returned to an average of over 1 million barrels a day, the first time in over a month it has breached that level. The EIA said daily production for the week ended May 26 averaged 1.004 million barrels a day. This week's average fell within estimates of analysts surveyed by Dow Jones who forecast production between 980,000 barrels and 1.01 million barrels a day.

AHEAD

--The USDA will release its weekly export sales report at 8:30 a.m. ET Friday.

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

--The USDA will release its weekly grains 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

June 01, 2023 18:07 ET (22:07 GMT)