Soybean Futures Climb as Traders Assess Risks -- Daily Grain Highlights

By Kirk Maltais

-- Soybeans for May delivery rose 1%, to $15.09 1/2 a bushel on the Chicago Board of Trade on Thursday, with traders hedging their bets ahead of uncertainties like renewal of the Russia-Ukraine grain deal or South American weather.

-- Wheat for May delivery climbed 0.4% to $7.13 a bushel.

-- Corn for May delivery fell 0.3% to $6.34 a bushel.

HIGHLIGHTS

Strategic Maneuvering: The slide in grain futures seen over the past week essentially removed a premium for risk and uncertainty that traders had added to account for poor weather in Argentina.

However, that premium looks to be returning, partly on uncertainty out of Russia ahead of the expiration of the Black Sea Grain Initiative in just over two weeks.

"[President Vladimir] Putin's kind of acting up again," Don Roose of U.S. Commodities told the WSJ. "We're adding risk premium back for that."

Traders view a potential Russian exit from the deal as not only constricting to the export market, but a sign of a new squeeze on fertilizer supplies.

Not Fazed: This morning's export sales report from the USDA did little to encourage trading, with old-crop soybean sales hitting a marketing-year low and corn and wheat sales on the low side of trader forecasts.

"Today's strength comes despite a terrible export sales report," Rich Nelson of Allendale Inc. told The Wall Street Journal.

However, Mr. Nelson added that traders appeared willing to brush off the report in favor of approaching uncertainties like Russia's expiring shipping deal and dry weather in Argentina with an abundance of caution.

INSIGHT

Great Expectations: The upcoming March WASDE report, scheduled for next week, may prove to be a reliable source of support for grain futures leading up to its release.

"I believe with the break we have seen in the last week in futures, traders are willing to come in and buy early in the month in anticipation of further South American crop revisions," Brian Splitt of AgMarket.net told the WSJ.

Last month's WASDE report had some changes to the production outlook for corn and soybeans coming from Brazil and Argentina, and traders are anticipating that the USDA will have to make further changes.

Falling to a New Low: Soybean export sales hit a marketing-year low in late February, the U.S. Agriculture Department reported Thursday.

For the week ended Feb. 23, export sales of soybeans totaled 360,700 metric tons during the 2022-23 marketing year -- the lowest weekly level for the year. Additional sales of 134,000 tons were reported for the 2023-24 marketing year.

Soybean sales for both marketing years combined fell on the low end of trader expectations. Grain traders surveyed by The Wall Street Journal forecast sales for both years to total anywhere from 300,000 tons to 975,000 tons.

AHEAD

-- The CFTC is scheduled to release its weekly commitments of traders report at 3:30 p.m. EST Friday.

-- The USDA is due to release its weekly grains export inspections report at 11 a.m. EST Monday.

-- 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 world supply and demand report at noon EST Wednesday.

Write to Kirk Maltais at [e-mail]

(END) Dow Jones Newswires

03-02-23 1552ET