The most active corn contract for July delivery fell one cent, or 0.13 percent, to settle at 7.6825 U.S. dollars per bushel. July wheat plunged 20.75 cents, or 1.94 percent, to settle at 10.5025 dollars per bushel. July soybean shed nine cents, or 0.53 percent, to settle at 16.985 dollars per bushel.
Wheat sagged on the expanding U.S. harvest while corn and soybean held on the prospect of heat and dryness impacting an expanding area of the Central United States into July. The trade volume has slowed as traders await the decision of the Federal Reserve monetary policy meeting on Wednesday.
However, Chicago-based research company AgResource noted that world inflation is based on limited supplies, not surging demand. The Federal Reserve does not have the right tools to fight supply inflation. Raising rates into 2023 will work to slow demand, not boost grain supplies. AgResource expects that the United States will work to lower trade tariffs on China for inflationary relief on consumer goods in the fourth quarter of this year.
CBOT should add weather premium ahead of the long U.S. weekend once the Federal Reserve raises rates.
U.S. West Texas Intermediate crude oil futures pushed back to March highs on solid demand and the record prices paid for gasoline and diesel. As a result, U.S. corn ethanol producers are looking at a huge grind margin of 0.80-0.90 dollars per bushel.
Russia has made an offensive into Ukraine's primary Donbas wheat area which could not only impact this year's harvest, but also the seeding of a new crop in August and September. Ukrainian farmers are suffering from a lack of fuel and operating capital to seed futures crops. The lack of future Ukraine wheat supplies exacerbates tightening world exportable wheat supplies.
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