Soybean Futures Fall as Negative Attitude Simmers — Daily Grain Highlights

By Kirk Maltais

-Soybeans for May delivery fell 1.1% to $11.53 1/4 a bushel, on the Chicago Board of Trade on Thursday, with favorable weather for crops in South America and weak U.S. export demand continuing to be the main factors keeping a lid on prices.

-Corn for March delivery fell 1% to $4.06 1/2 a bushel.

-Wheat for May delivery rose 0.2% to $5.81 a bushel.

HIGHLIGHTS

Let it Sit: Any fresh news on global supply and demand for grains continues to be sparse, making selling and adding short positions the natural status quo for futures. "A lot of this was technical," said Karl Setzer of Consus Ag Consulting. "The simple lack of a fresh bullish story is weighing on trade." With South American weather seen as good and U.S. export demand showing little signs of improvement, the momentum for grains stayed mostly negative for both soybeans and corn.

Losing Steam: For wheat in particular, traders thought early that today would be the push-back against large short positions held by managed money funds. However, that was not to be "Just some correction in wheat after today's rally that was mostly due to, as said in Seinfeld, 'nothing' and pressure from falling corn and bean prices," Ocean State Research's Joel Karlin said.

INSIGHT

How Low to Go: Traders continue to eye the potential for a short-covering rally in the near-future. "We're approaching the $4/bushel level for the first time since early November 2020, as speculative funds push their net short position towards record territory," said Matt Zeller of StoneX in a note regarding corn prices. Zeller added that if a short-covering rally does ensue, it's unlikely to be lasting. "Any rally attempts continue to be sold off quickly with the markets lacking any real bullish fundamentals before the U.S. growing season begins."

Early Thaw: Warmer weather in the U.S. Midwest may place even more pressure on CBOT grains as farmers are forced to put more of their harvest on the market. "Warmer temperatures mean that corn needs to move before it goes out of condition," said Arlan Suderman of StoneX in a note. "The farmer is undersold relative to normal for both corn and soybeans in both Brazil and in the United States." The narrative of farmers being reluctant to sell on the expectation of a rebound in prices has been floating around the market for months, but net short positions on grain futures have been stubborn, keeping prices below where farmers hoped to sell most of their grain at.

Backing Away: After climbing close to the 26 million barrel level in last week's report, U.S. ethanol inventories have pulled back, the EIA said today. In its latest report, the agency said that inventories fell just over 300 million barrels for the week ended Feb. 16 - to 25.5 million barrels. That's on the low-end of analyst estimates, with analysts surveyed by Dow Jones this week forecasting inventories between 25.3 million barrels and 26.8 million barrels. Meanwhile, daily production inched up, rising to 1.084 million barrels a day for the week. That's up 1,000 barrels a day from the previous week, and lands on the high end of analyst estimates.

AHEAD

-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 22, 2024 15:16 ET (20:16 GMT)

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