By Kirk Maltais


-Wheat for March delivery fell 1.4% to $5.91 1/2 a bushel on the Chicago Board of Trade on Monday as CBOT prices followed Russian and European prices down as exporters competed for weak global demand.

-Corn for March delivery rose 0.1% to $4.43 1/4 a bushel.

-Soybeans for March delivery rose 0.8% to $11.98 a bushel.


HIGHLIGHTS


Lax Demand Picture: U.S. wheat can't get any traction in the global export market, which weighed down futures this afternoon. "Even with U.S. wheat prices the cheapest in over three years, total wheat inspections year to date are down 18.4% versus the prior years," said Joel Karlin of Ocean State Research. "So a cut in our exports could be seen in Thursday's WASDE report." Prices in Russia and Europe have been trending down, despite ongoing fighting in the Black Sea and the Red Sea threatening to disrupt on-water supply chains.

Major Drivers: The mixed close for grains came as the broad economic outlook in the U.S. pressured the agricultural complex and other commodities in general. The U.S. dollar index was up 0.5% this afternoon after Fed Chair Powell warned over the weekend that rate-cut hopes held by markets may be premature. The current macroeconomic climate may keep demand for U.S. grain exports limited.


INSIGHT


Eyes on the Prize: Thursday's WASDE report from the USDA is expected to be relatively quiet, except for in South America. Analysts surveyed by The Wall Street Journal forecasting lower production in Brazil and slightly higher production in Argentina. In the U.S., little in the way of change from the previous month is expected. Analysts are forecasting U.S. production to stay close to previous forecasts, with corn seen as showing the biggest change -- forecast down 28 million bushels to 2.13 billion bushels.

Big Shorts: CBOT grains were lower with Friday's Commitment of Traders report confirming that fund traders are still building short positions in grains. For corn, which has a net short position of over 280,000 contracts as of Jan. 30, it's a continuation of a downtrend that started in October, Naomi Blohm of Total Farm Marketing said in a note. The CFTC also reported a larger soybeans net short among fund traders, at just over 108,000 contracts. The big short positions could provide fuel for major short-covering rallies in the future.

Behind Pace: Export inspections of U.S. soybeans surged from the previous week, but remain well behind the pace of last year as South American soybeans continue to be stiff competition. The USDA reported Monday that soybean inspections for the week ended Feb. 1 totaled 1.43 million metric tons. That's significantly higher than 913,448 tons reported for the same time last year, although not as high as 1.91 million tons reported at this time last year. Even so, soybeans are still well behind the pace of last year's cumulative total - dragging by 23.6% at 29.12 million tons. Traders say that competition from South American sources are keeping a lid on U.S. shipments.


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 Estimates report at noon ET Thursday.


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


(END) Dow Jones Newswires

02-05-24 1501ET