By Kirk Maltais
--Soybeans for March delivery fell 0.6% to $10.46 a bushel on the Chicago Board of Trade on Tuesday, with traders and analysts unsure about what policy moves President-elect Trump will make after he's inaugurated next week.
--Corn for March delivery fell 0.4% to $4.74 1/2 a bushel.
--Wheat for March delivery rose 0.3% to $5.47 a bushel.
HIGHLIGHTS
Memory Fade: The impact from Friday's WASDE report, in which the USDA made cuts to production and ending stock outlooks for corn and soybeans, appears to have been played out pricewise, said Naomi Blohm of Total Farm Marketing in a note. Therefore, the fundamental focus going forward is expected to be Argentina's crop weather, as well as paring risk ahead of President-elect Trump's inauguration. "There will be position squaring in many commodities Thursday and Friday this week, ahead of the 3-day holiday weekend and uncertainty of the Trump administration moves on Monday," said Blohm.
Crowded Room: The delayed CFTC Commitments of Traders report, which was held in observance of the National Day of Mourning for the late President Jimmy Carter last week, showed that managed money traders continuing to pile into long positions in corn futures - adding over 12,000 new long contracts through the week ended Jan. 7, this while reducing exposure to shorts by over 12,000 contracts--bringing them to a net long in corn of over 253,000 contracts. It explains why corn has traded strongly recently, but also signaled to traders Tuesday that corn optimism may be overplayed, said AgResource in a note.
INSIGHT
Bin Buster: The latest outlook from Brazil's Conab projects a harvest of 322.3 million tons of grain in 2024/25. That's 8% higher than the last harvest, supported by favorable weather seen in Brazil in recent months. The outlook for soybeans is relatively flat from Conab's previous forecast, at 166.3 million tons, as harvesting soon begins, says Conab. "The weather conditions… have been favorable for the crop so far, but Conab is still keeping an eye on the effects of climate behavior until the end of the grain harvesting work," says the agency. Corn output is estimated at 119.6 million tons for 2024/25.
Get Out in Front of It: Commodity futures have, in many cases, flourished since the 2024 elections in November -- with the desire to be prepared in the event of a sudden move toward tariffs by Trump once he's inaugurated next week. This has allowed commodities to trade somewhat independently of the U.S. dollar, which has also moved higher since the election. Typically, a stronger dollar is a pressure point for commodity futures, but Trump's tariff threats have commodities moving higher despite the stronger dollar. "We square this away with the bullish impact of pre-tariff front loading," said Maximilian Layton of Citi Research in a note.
Under New Management: Agricultural land in the U.S. owned by foreign-based entities rose in 2023, according to data from the USDA released this month. Roughly 45.9 million acres of U.S. agricultural land has foreign owners, with Canada having the largest portion, and along with the Netherlands, Italy, the UK, and Germany accounting for 62% of foreign-owned land, according to an analysis of USDA data by the American Farm Bureau Federation. Foreign-owned land remains a sliver of the total, but has steadily grown--with foreign ownership of cropland doubling since 2018.
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 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
01-14-25 1507ET