By Kirk Maltais
--Wheat for March delivery rose 2.6%, to $6.18 1/4 a bushel, on the Chicago Board of Trade on Monday, rebounding after Friday's CTFC report showed a larger net short position for funds.
--Corn for March delivery rose 0.1%, to $4.85 a bushel.
--Soybeans for January delivery fell 1.3%, to $13.07 1/4 a bushel
HIGHLIGHTS
In Response: Friday's Commitment of Traders report from the CFTC showed a growing short-position in wheat among fund traders, which in turn gave traders the go-ahead to continue short-covering started last week. Traders also reacted to news of a new flash sale of wheat to China, said Arlan Suderman of StoneX in a note. "None of this recent export demand turns the supply and demand tables bullish, but when combined with stabilizing Black Sea prices, makes fund managers holding big short positions consider the possibility that we may have carved out a bottom in the market, at least for now," he said.
Flagging Momentum: CBOT grains encountered pressure Monday by funds maintaining their big short positions in corn and wheat while adding to shorts in soybeans, something that is expected to continue heading into 2024, said Citi in its 2024 Commodities Outlook report. "Corn and wheat prices seem poised to continue grinding lower on building inventory cushions and exportable surpluses--despite the dissolution of the Black Sea trade corridor," the firm said. For soybeans, the boost prices are getting from South American weather woes is expected to be limited. "A recovery in Argentina production and bean crushing in 2024 amid prospects for another bumper Brazil crop should alleviate price pressures," Citi said.
INSIGHT
Gauging Importance: While the sale of 440,000 metric tons of U.S. wheat to China is seen as a positive development for CBOT futures, traders are skeptical that it signals a larger change in U.S. wheat export demand. "The sale...to China, though rumored last week, is also a positive--though it won't change the needle much on what's shaping up to be the smallest amount of US wheat exported since the 1971/72 season," said Joel Karlin of Ocean State Research. Wheat shipments for the 2023/24 marketing year reported by the USDA Monday are at 8.32 million tons, down almost 24% from this time last year.
Shipments Surge: Export inspections of U.S. corn have climbed from where they were at this time last week, the USDA said. In its weekly Grain Export Inspections report, the USDA said corn shipments totaled 1.16 million metric tons for the week ended Nov. 30. That's more than double of the 408,855 tons reported last week, and higher than the 833,610 tons reported at this time last year. Soybean and wheat inspections were lower versus the prior week and last year, the USDA said, totaling 1.11 million tons and 187,955 tons, respectively.
Weaker Crop: Statistics Canada said that the total wheat crop in Canada is expected to decline from the previous year, to 31.95 million metric tons in 2023. That's off nearly 7% from 2022, driven by drop-offs in durum and spring wheat. Winter wheat production is seen as higher in 2023, says StatsCan, totaling 3.15 million tons, up from 2.7 million tons in 2022. For the wheat market, falling Canadian production could put upward pressure on wheat export prices in North America, particularly U.S. wheat, supporting higher prices seen due the short-covering bounce extending into this 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 Friday.
--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
12-04-23 1545ET
