By Kirk Maltais
-- Corn for July delivery fell 2.2% to $6.60 1/2 a bushel amid a weather outlook for freshly planted Midwestern crops that improved throughout the day.
-- Wheat for July delivery fell 1.5% to $6.76 1/4 a bushel.
-- Soybeans for July delivery fell 0.9% to $15.52 1/2 a bushel.
Tempered Outlook: A forecast showing very hot and dry conditions in the Midwest in the coming days was tempered later in the day, taking support away from grains futures.
Additionally, damage suspected to have happened in last weekend's cold and wet weekend doesn't appear to be extensive, said Karl Setzer of AgriVisor.
"Last weekend's freeze damage across the Corn Belt is now being assessed," said Mr. Setzer. "It appears as though not enough of an area was impacted to make a significant change in overall production."
Almighty Dollar: Another factor pressuring grains Thursday was an uptick seen in the U.S. dollar, with the WSJ's dollar index is up 0.7%.
"Wheat is probably the most susceptible to a strong dollar on the global market, as it is grown in most areas of the world," said Arlan Suderman of StoneX. "As such, a strong dollar makes it difficult for U.S. wheat to compete."
For much of the day, wheat futures led CBOT grains lower.
Fleeting High: Soybean oil futures on the CBOT opened trading Thursday above 71 cents per pound -- an all-time high -- beating the previous high set in March 2008. Tightness in the global vegetable oil market has been a factor pushing soybean prices higher, providing them support on an otherwise down day. Following the market's open, soyoil futures pared their gains, with the most-active contract closing the day down 2.2% to just above 69 cents per pound.
Surprise Rise: U.S. ethanol inventories rose from the previous week, defying analyst forecasts that inventories would continue to decline. In the EIA's latest report, ethanol inventories for the week ended May 28 rose 608,000 barrels to 19.59 million barrels. This is well up from the forecasts of analysts surveyed by Dow Jones this week, who had predicted stocks to fall to as low as 18.5 million barrels for the week.
Meanwhile, weekly production through May 28 rose 23,000 barrels to 1.03 million barrels per day. This is slightly more than forecast by analysts.
Curb Your Enthusiasm: Export sales of U.S. corn are expected to slide significantly from the previous week, with China absent from large export buying for the week ended May 27. Grain traders surveyed by The Wall Street Journal estimate that corn sales will total anywhere from 350,000 metric tons to 1.2 million tons, which would be well down from the 6.25 million tons reported last week by the USDA.
Sales of soybeans and wheat look to be similar to the previous week, possibly exceeding those figures.
Cost Curve: While prices for crops such as corn and soybeans have been on the rise this year, U.S. farmers are seeing higher costs eat into their profit margins, the Federal Reserve Board said in a report this week. In the Midwest, costs for farmers are on the rise, even though higher prices have given farmers reason for optimism.
"Supply chain issues are raising many producers' costs although higher commodity prices have helped generate higher incomes, maintaining profit margins," the Fed said. Overall, farm incomes rose in the second quarter of the year, according to the report.
-- The USDA is scheduled to release its weekly export sales report at 8:30 a.m. EDT Friday.
-- The CFTC is due to release its weekly commitments of traders report at 3:30 p.m. EDT Friday.
-- The USDA is scheduled to release its weekly export inspections report at 11 a.m. EDT Monday.
-- The USDA is due to release its weekly crop progress report at 4 p.m. EDT Monday.
Write to Kirk Maltais at email@example.com
(END) Dow Jones Newswires