Corn Futures Slide as Rally Halts — Daily Grain Highlights

By Kirk Maltais

-Corn for March delivery fell 2% to $4.10 1/4 a bushel, on the Chicago Board of Trade on Wednesday, with yesterday's rally coming to an abrupt stop as the large short positions on grains loom large.

-Soybeans for March delivery fell 1.6% to $11.60 1/4 a bushel.

-Wheat for May delivery fell 0.3% to $5.77 1/2 a bushel.

HIGHLIGHTS

Tripping Up: Yesterday's talk of a bottom being found in CBOT grains after spending the start of the year in decline proved premature, with futures spending the day lower. Expectations of ample crop supplies for the upcoming crop year continues to keep any momentum in grains in check. "It's going to take a massive fundamental shift to turn the tide and bring the grains off lows; speculative funds continue to push the market further into the net short position overall," said Matt Zeller of StoneX in a note. The CFTC reported larger net short positions for corn and soybeans Friday, but some analysts note that the rate grain futures are sinking has slowed.

Waiting for Clarity: The Biden Administration is expected to unveil new rules that may disrupt the use of ethanol in favor of other biofuels--which pressured corn specifically today. "Vilsack is pro E-15, yet chatter yesterday that the Biden Administration is expected to back a tougher ethanol climate model which would make it harder for corn ethanol to get government subsidies when used for production of sustainable aviation fuel," said Naomi Blohm of Total Farm Marketing in a note, referencing Tom Vilsack, the U.S. Secretary of Agriculture. Renewable fuels are expected to be a strong domestic demand source for U.S. crops.

INSIGHT

Watching the Bellwether: Dropping prices out of Russia for wheat exports continues to pressure prices in competing nations regions like the U.S. and Europe. Prices for wheat exports from Russia hit their lowest since Sept. 2020 at $218-$224 a metric ton, according to SovEcon. The undercutting of rivals seems to be working, as Russian wheat sales for February are at roughly 2.8 million tons -- up nearly a million tons from January, SovEcon said in a note.

Breaching the Next Barrier: Analysts surveyed by Dow Jones say U.S. ethanol inventories could go above the 26 million barrel mark this week--potentially closing in on 27 million barrels. Should this happen, it would be the first time in nearly a year that ethanol stocks have been so high. The build-up in supplies comes as Agriculture Secretary Tom Vilsack says that he's confident that E-15 gasoline will be available year-round across the country by 2025. Several Midwestern states are pushing for year-round sales of E-15, which is a blend of gasoline with 15% ethanol.

AHEAD

-The EIA will release its weekly ethanol production and stocks report at 11 a.m. ET Thursday.

-The USDA will release its monthly Livestock Slaughter report at 3 p.m. ET Thursday.

-The USDA will release its weekly export sales report at 8:30 a.m. ET Friday.

-The USDA will release its monthly Cattle on Feed report at 3 p.m. ET Friday.

-The USDA will release its monthly Cold Storage report at 3 p.m. ET Friday.

-The CFTC will release its weekly Commitment of Traders report at 3:30 p.m. ET Friday.

Write to Kirk Maltais at kirk.maltais@wsj.com

(END) Dow Jones Newswires

February 21, 2024 15:07 ET (20:07 GMT)

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