By Kirk Maltais


-- Wheat for March delivery rose 3.6% to $5.58 1/2 a bushel on the Chicago Board of Trade on Tuesday, leading the way higher as a weaker U.S. dollar made grains more attractive for fund buyers, this while the net long in corn is already high according to CFTC data.

-- Soybeans for March delivery rose 3.2% to $10.68 a bushel.

-- Corn for March delivery rose 1.1% to $4.89 3/4 a bushel.


HIGHLIGHTS


Falling Back: A weaker U.S. dollar provided support for higher grain futures, making the row crop complex on the CBOT among the highest-gaining commodities. The appetite for soybeans and wheat comes from fund traders already holding a lot of long positions in corn futures.

"The U.S. dollar is imploding which is bringing managed money back to commodities," said Karl Setzer of Consus Ag Consulting. "Funds are holding a sizable long in corn so more buying is in soybeans and wheat."


Frozen Focus: The size of the Russian wheat crop held steady this month, but the possibility of weather-related risk to its health helped propel wheat.

"Unusually warm weather has caused the snow cover, which accumulated late last year, to thin in Russia's central regions and disappear entirely in the South," said Andrey Sizov of SovEcon. Sizov adds that thinner snow cover along with the rocky start for the winter wheat crop means that Russian crops are extra susceptible to a freezing event that induces "substantial winterkill."


On the Dry Side: Expectations of strong rainfall in Argentina over the weekend didn't pan out, another factor that sent grains soaring.

Less-than-expected rainfall in Argentine growing areas combined with a forecast showing little to come supported the grains in morning trading, said Doug Bergman of RCM Alternatives in a note.

The Rosario Board of Trade in Argentina said that an ongoing drought would result in lower yield estimates for the country's corn and soybeans.


INSIGHT


Sidelined: Across markets, traders appeared to set aside the notion that new tariffs are imminent from the Trump administration.

Instead, traders appear to be settling into a new normal where conflicting signals are sent around certain issues and actions, with the president suggesting 25% tariffs against Canada and Mexico beginning in February, although with no executive orders to support that.

"The first, and most obvious, point is that this is unlikely to be the last such episode over the second Trump presidency," said Jonas Goltermann of Capital Economics in a note.


Phone Tag: A call between Trump and Chinese President Xi on Friday helped bolster the sentiment that a new trade war between the two sides isn't necessarily at hand, which helped bolster the pivot of fund traders into long soybean positions, said Tomm Pfitzenmaier of Summit Commodity Brokerage in a note.

However, Pfitzenmaier cautioned, there are a lot of unknowns that remain in place that could unspool this pivot.


Big Buildup: A price-positive sentiment for CBOT corn kept fund traders building their already sizable net long position. Friday's Commitments of Traders Report from the CFTC showed managed money traders increasing their exposure to long positions by nearly 26,000 contracts, this while cutting over 13,000 short contracts.

The net long held by these traders now rests at nearly 300,000 contracts as of Jan. 14, closing in on the all-time record, said Daniel Flynn of Price Futures Group in a note.

Traders also added long exposure to soybean futures, while pulling back on longs in wheat.


AHEAD


-- The EIA is scheduled to release its weekly ethanol production and stocks report at noon EST Thursday.

-- The USDA is due to release its weekly export sales report at 8:30 a.m. EST Friday.

-- The USDA is scheduled to release its monthly Cattle on Feed Report at 3 p.m. EST Friday.

-- The USDA is due to release its monthly cold storage report at 3 p.m. EST Friday.

-- The CFTC is scheduled to release its weekly Commitments of Traders Report at 3:30 p.m. EST Friday.


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


(END) Dow Jones Newswires

01-21-25 1540ET