By Kirk Maltais
--Wheat for March delivery fell 1.4%, to $7.31 a bushel, on the Chicago Board of Trade on Tuesday, in response to Russia's aggressively-priced offers to fill an Egyptian wheat tender.
--Soybeans for March delivery fell 0.2% to $14.85 a bushel.
--Corn for March delivery rose 0.3% to $6.55 a bushel.
HIGHLIGHTS
Bargain Basement: The cheapest Russian offers to sell Egypt wheat were sitting around $337 to $340 a metric ton this morning, which is $10 to $13 per ton lower than offers from Romania or France, said AgResource in a note. "A purchase of Russian wheat appears inevitable," said the firm. Wheat futures have been on the decline since the start of the year, falling 8% since the close of trading Dec. 30.
Regional Needs: The cost for U.S. corn compared to Brazilian corn has grown tighter - making corn exports more attractive for global export customers. "The spread between spot South America and U.S. corn is narrowing, so traders are becoming more optimistic U.S. corn exports will increase over the medium term with Brazil starting to run out of exportable supplies ahead of their new crop," Terry Reilly of Futures International told the WSJ. Earlier this week, the USDA reported that shipments of U.S. corn have fallen well behind last year's pace - with inspections totaling 10 million metric tons for the current market year, down from 14.1 million metric tons at this time last year.
INSIGHTS
Big Day Out: Traders were generally cautious in today's session, awaiting a slew of market-moving news expected to drop later this week. "News is backloaded this week as Thursday will have the WASDE, Export Sales, Quarterly Stocks and CONAB grain reports," said AgriSompo in a note. The next Consumer Price Index report is also due out on Thursday, giving commodities and other markets new information to trade on.
Potential Easing: A steep decline in natural gas prices may prove to be a boon for farmers. Natural gas futures have shaved off considerable value in the past trading day alone, falling 6.9% to $3.64 per mmBtu. That's a decline of over 40% in the past month, which in turn carries implications for farmers because natural gas is used to produce fertilizer. "With natural gas prices dropping like a stone, fertilizer costs are going to come down sharply this year for U.S. growers," independent trader Dan Norcini told the WSJ.
Moving the Needle: Daily production of ethanol in the U.S. is expected to jump from last week's figure of 844,000 barrels a day reported by the EIA, according to analysts surveyed by Dow Jones. They forecast daily production to go as high as 995,000 barrels a day. If that were to happen, that would bring production back to its highest level in nearly a month. However, analysts are less sure about inventories - projecting them to land anywhere from 23.56 million barrels to 25.34 million barrels, versus 24.44 million barrels reported by the EIA last week.
AHEAD
--The EIA will release its weekly ethanol production and stocks report at 10:30 a.m. ET Wednesday.
--The USDA will release its weekly export sales report at 8:30 a.m. ET Thursday.
--The USDA will release its monthly world supply and demand report at noon ET Thursday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
01-10-23 1537ET
