By Kirk Maltais
--Corn for March delivery rose 1.7%, to $6.86 1/4 a bushel, on the Chicago Board of Trade on Tuesday, with fund traders continuing to buy into grain futures on the strength of last week's USDA reports.
--Soybeans for March delivery rose 0.8% to $15.39 3/4 a bushel.
--Wheat for March delivery rose 0.6% to $7.48 1/2 a bushel.
HIGHLIGHTS
Momentous Occasion: Despite speculation from grain traders last week that the impact of the USDA's slate of reports would quickly wilt, the strength of the WASDE and quarterly stocks reports - showing reduced harvested area and reduced stocks amid less export demand - lifted futures in the latter half of the day. "Grain and oilseed prices started the day in negative territory, but they firmed through the morning as fund managers jumped back on the bandwagon of buyers that received support from Thursday's USDA WASDE crop report," said Arlan Suderman of StoneX in a note.
Lower Rate: Soybean futures in particular felt pressure in morning and midday trading, due in part to lower-than-expected soybean crushing reported for the month of December by the National Oilseed Processing Association. "The cold snap during the third week of December across the U.S. likely impacted crushing rates last month," said Terry Reilly of Futures International in a note. NOPA says that the rate of crush was 177.5 million bushels, which is well below the trade estimate of 182.9 million bushels, Mr. Reilly said. It's also well below the rate of 186.4 million bushels reported by NOPA at this time last year.
If It Keeps on Rainin'...: Pre-market pressure for grain futures across the board came from traders reacting to expectations of rainfall in both Brazil and Argentina, bolstering stronger crops in those countries. "CBOT ag markets traded lower to start the week amid the forecast for better rains across Argentina and Southern Brazil, while a needed break from the rain occurs across Northern Brazil to quicken the harvest," said AgResource in a note.
INSIGHT
Staying Stuck: The USDA's reports buoyed futures today, but the mix of the two factors is likely to keep grains trading at a relatively narrow level in the coming days, said Karl Setzer of Mid-Co Commodities. "We could easily see this two-sided trade pattern until we get closer to spring and weather in the U.S. becomes more of a factor," Mr. Setzer told the WSJ. Until then, the latest updates to the forecasts for South American growing areas is expected to be the source of direction for grains.
Slice and Dice: Prior to the release of the USDA reports last week, managed money traders were in the process of cutting their exposure to long positions in grains, according to Friday's Commitment of Traders report from the CFTC. The report shows that managed money funds cut longs for corn, soybeans, and soft red and hard red wheat - this while adding short contracts. Corn showed the most activity for the week, which ended January 10 - with nearly 32,000 long contracts cut, along with over 15,000 short contracts added.
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 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
01-17-23 1503ET
