By Paulo Trevisani

-- Soybeans for March delivery rose 1.3% to $12.39 1/2 a bushel on the Chicago Board of Trade on Tuesday, extending gains fueled by uncertainty around South American production.

-- Corn for March delivery rose 0.2% to $4.46 1/2 a bushel.

-- Wheat for March delivery was flat, at $5.96 1/2 a bushel.

HIGHLIGHTS

Dry Beans: The prospect of dry weather in Argentina supported soybean futures, while the size of Brazil's crop remained uncertain.

AgResource said the drought in northern Brazil is "historically rare" and "few know how to adjust yield/crop size." If the production ends up at 146 million metric tons instead of the early estimate of 157 million tons, it could have "big implications" for U.S. soy export demand, AgResource said.

"ARC research shows that a Brazilian soy crop of 146 MMTs would cut Brazilian crop year exports by 11 MMTs," the firm said.

Delayed Corn: AgResource says in a report that corn open interest has gained more than 160,000 contracts since the start of the year.

"Managed money has placed sizeable bearish CBOT bets, while end users and importers use the break to accumulate forward ownership," AgResource said.

Corn prices rose with help from South American weather. AgResource said "a continuation of the heavy northern Brazilian rain would pose crop quality risk and slow the winter corn seeding program."

INSIGHT

Brazilian Driver: Brazil's production difficulties continue to be a driving factor in soybeans futures, Summit's Tomm Pfitzenmaier said in a note. Unfavorable weather conditions for the country's crops have triggered downward reviews of production estimates.

"The USDA and CONAB estimates are in the mid-150 [million metric tons] area and that is what the trade is using," Pfitzenmaier said. "A crop size that is down in the 145 MMT range would certainly be price supportive."

European Pressure: A decrease in European wheat production is failing to put upward pressure on prices, Hedgepoint Global said in a report.

The start of the harvest has been "characterized by delayed planting in France and Germany, which probably resulted in a decrease in the planted area in both countries," Hedgepoint said, adding "the projections for total production in the continent are now more positive compared to the estimates made two months ago."

The 2024-25 wheat harvest in the European Union is expected to be smaller than the current crop, "intensifying the pressure on the global balance," Hedgepoint said.

AHEAD

-- The EIA is scheduled to release its weekly ethanol production and stocks report at 10:30 a.m. EST Wednesday.

-- The USDA is due to release its monthly cold storage report at 3 p.m. EST Wednesday.

-- The USDA is scheduled to release its weekly export sales report at 8:30 a.m. EST Thursday.

-- The USDA is due to release its monthly livestock slaughter report at 3 p.m. EST Thursday.

-- The CFTC is scheduled to release its weekly Commitments of Traders Report at 3:30 p.m. EST Friday.

Write to Paulo Trevisani at paulo.trevisani@wsj.com

(END) Dow Jones Newswires

January 23, 2024 15:47 ET (20:47 GMT)