Soybeans were sharply higher, making new six and a half month highs on speculative and technical buying. Beans are keeping very close watch on weather impact for soybeans in the U.S. Delta and oilseeds in Canada and China. Also, the near term supply remains very tight and demand continues to look solid, so it looks like price rationing is in effect. In any case, we’re headed into the critical phase of development for U.S. soybeans, so weather will continue to be the big mover. Soybean meal was higher on the sentiment that feed demand will rise due to world wheat quality issues and oil was higher following the lead of crude oil and beans. According to Macquarie Group, U.S. soybeans could average 42.9 bushels per acre, in-line with USDA’s July guess, but add it’s still too early to tell.

Corn hit new two week highs on short covering, technical buying and spillover from beans and wheat. Past that, there was no real fresh news one way or the other. Traders are keeping an eye on the hot, dry forecasts for early August across most of the Midwest and in any event, corn doesn’t want to get left behind, primarily due to the feed connection with wheat. However, with most of the corn crop through the pollination phase, weather’s a bigger worry for beans than it is for corn. Ethanol futures were higher. Macquarie Group, via Dow Jones Newswires, expects the final U.S. corn yield to be 163.1 bushels per acre, compared to USDA’s July guess of 163.5 bushels per acre.

The wheat complex was sharply higher on fund and technical buying. There are continued crop quality concerns for Canada, Eastern Europe and the Black Sea region. Chicago outpaced Kansas City and Minneapolis as that type is used for feed and a lot of the crop loss is feed wheat. In fact, according to the CME Group, nearby Chicago gained almost 42% during July, the largest percentage gain for a front month contract since 1951. There’s a lot of talk in the market that either Russia or Ukraine, or both, will severely restrict or even temporarily halt exports due to the tight supply, with Ukrainian firm Landkom, via Dow Jones Newswires, stating it expects Kiev to increase intervention purchases to keep domestic supplies at acceptable levels and the Ukraine Agrarian Federation pegging Russia’s exports at 9 million to 10 million tons, compared to SovEcon’s guess of 11 million and the IGC’s projection of 13.4 million. According to Russia’s Ag Ministry, 33% of that crop is harvested, with yield behind last year and the pace faster than average due to drought. German firm Toepfer has Europe’s wheat crop at 126 million to 129 million and the U.N.’s Food and Agriculture Organization is expected to make a big reduction to its production estimate. Japan bought 141,567 tons of wheat (70,101 tons U.S. dark northern spring, 36,126 tons Canadian western red spring and 35,340 tons Australian standard white) and Egypt issued a tender for 120,000 tons of wheat, mostly from the U.S.