Corn Falls as Traders Parse World Events -- Daily Grain Highlights
By Kirk Maltais
--Corn for March delivery fell 0.3%, to $6.69 1/2 a bushel, on
the Chicago Board of Trade on Tuesday, with traders noncommittal as
they waited for more signals that unrest in China was abating.
--Wheat for March delivery rose 0.1% to $7.81 1/2 a bushel.
--Soybeans for January delivery rose 0.2% to $14.59 1/2 a
Stuck in the Middle: Grain traders found little reason to make
big moves in grains today, as markets across the board became more
hopeful that China can further loosen Covid-19 restrictions
following nationwide protests there. For corn, the lack of
direction meant a mostly lower trading session. "Corn is having a
tough time following through, either on the downside, or on the
upside," said Charlie Sernatinger of ED&F Man Capital. "But
when we are already right at what should be the average price for
the season, we don't have a lot of momentum that can be generated
from this price level."
Hot Spell: Abnormally warm weather in Argentina is raising
concerns about the soil moisture there, and how it may adversely
impact crops. The country's crop-growing regions were dry over the
weekend, and will briefly see some isolated showers before going
back to hot conditions. "Dryness and drought continue to be
concerns until showers become more consistent," said DTN in a note.
This outlook provided support for CBOT soybeans throughout the day,
due to Argentina being in the process of seeding its soy crop
Gradual Building: Hedge funds are growing their short positions
in U.S. wheat futures, this after Russia and Ukraine reached a deal
earlier this month to continue the Black Sea grain export deal.
According to the CFTC's latest Commitment of Traders report, short
positions of soft red winter wheat reported by managed money funds
rose by over 6,500 contracts through the week ended November 22 -
bringing their total position to net short roughly 53,400
contracts. Funds also grew their short positions in spring wheat
and hard red winter wheat for the week.
Defying Gravity: Even with hedge funds picking up more short
positions and open interest in agricultural futures falling for a
third consecutive week, analysts with JPMorgan Global Commodities
Research are forecasting that prices for grains will rise through
the first quarter of 2023. "Fundamentals continue to drive our
bullish risk bias across agri markets, and our price forecasts call
for a rise across the board," said the firm in a note. JPMorgan
also adds that a mild U.S. recession later in the year may curb
some of agriculture's upward momentum. The firm reports that for
the week ended November 25, open interest in agricultural futures
fell by 1%, or $3.8 billion, to $284.1 billion.
Back Tracking: Daily ethanol production in the U.S. is expected
to pull back in this week's report from the EIA, according to
analysts surveyed by Dow Jones this week. Analysts forecasted
production at a range between 1.025 million barrels per day and
1.052 million barrels per day, with most hedging towards the lower
side of the range. Last week, the EIA reported that average daily
ethanol production hit 1.041 million bpd. Meanwhile, analysts are
forecasting a 200,000-barrel move in either direction for
inventories, with a range of 22.63 million barrels to 23.01 million
--Hormel Foods Corp. will release its fourth-quarter earnings
report before the stock market opens Wednesday.
--The EIA will release its weekly ethanol production and stocks
report at 10:30 a.m. ET Wednesday.
--The USDA will release its monthly agricultural prices report
at 3 p.m. ET Wednesday.
Write to Kirk Maltais at email@example.com
(END) Dow Jones Newswires
November 29, 2022 15:24 ET (20:24 GMT)
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