By Kirk Maltais


--Wheat for March delivery rose 1.3% to $5.93 1/4 a bushel, on the Chicago Board of Trade on Friday, with traders absorbing building indications of a tighter supply/demand situation.

--Soybeans for March delivery rose 0.04% to $12.14 a bushel.

--Corn for March delivery rose 0.3% to $4.45 1/4 a bushel.


HIGHLIGHTS


Catching Up: A delayed reaction from last week's WASDE and Grains Stocks report from the USDA lifted wheat Friday. The reports gave the impression that a tighter supply/demand picture may be in store for world buyers this year. However, the CBOT ag complex didn't initially reflect this scenario. "Prices did not reflect that way obviously, I think that was just from a mass selling program across all ags/feedgrains," John Payne of Hedgepoint Global said. Potential winterkill in some U.S. growing areas is also boosted wheat this week.

South American Focus: Grain traders' focus on growing conditions in South America returned Friday after taking a lesser role in recent sessions. "Operators remain vigilant regarding the South American situation in terms of yields for crops currently being harvested in Brazil, and the state of crops in Argentina following the finalization of sowings," AgriTel said in a note. Traders continue to monitor forecasts there, which show heavy rain arriving in many areas over the weekend.

Fresh Exports: The USDA reported a fresh flash sale of 297,000 metric tons of soybeans to China. The announcement comes after the agency's weekly export sales report showed soybean sales on the high end of analyst forecasts. The fresh sales come as analysts and traders have mulled over what would be needed in order to spur short-covering for grain futures viewed as oversold. "The market is in the process of correcting from oversold with room to trade higher as that happens," said Doug Bergman of RCM Alternatives in a note.


INSIGHT


Poking Along: The substantial short-covering expected by traders this week has yet to materialize. For corn, the reason behind it is questions about available supply meeting what's characterized as weak demand. "Ideas of weak demand are keeping prices low," Jack Scoville of Price Futures Group said in a note. "The market feels that there is more than enough corn for any demand." Export sales reported by the USDA Friday were stronger than in previous weeks, but still failed to motivate excitement among traders.

New Shorts: The CFTC's latest Commitment of Traders report, due at 3:30 p.m. Eastern time, is expected to show building short positions in grains through the week ended Jan. 16, Joel Karlin of Ocean State Research said. "The trade is expecting this afternoon's COT report to show funds added to what already are large short positions in corn and wheat and, having liquidated recent longs in beans and meal, are probably now short those markets also," Karlin said. Traders and analysts have been expecting prices to show a strong turnaround given the large short positions in grains, but that has yet to occur.


AHEAD


--The USDA will release its weekly grains export inspections report at 11 a.m. ET Monday.

--The EIA will release its weekly ethanol production and stocks report at 10:30 a.m. ET Wednesday.

-The USDA will release its monthly Cold Storage report at 3 p.m. ET Wednesday.


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

(END) Dow Jones Newswires

01-19-24 1515ET