By Kirk Maltais
--Wheat for March delivery rose 2% to $5.40 a bushel on the Chicago Board of Trade Monday, with grain traders easing the selling trend on uncertainty ahead of this Friday's WASDE report from the USDA.
- Corn for March delivery rose 1.3% to $4.57 a bushel.
- Soybeans for March delivery rose 0.5% to $9.96 1/2 a bushel.
HIGHLIGHTS
Expecting the Unexpected: Monday's reversal from last Friday's selling comes as traders look ahead to the upcoming WASDE report from the USDA -- with the potential for a market-shaking surprise not lost on traders. "Friday's grain market sell-off did feel a bit harsh and prices are rebounding this morning in turn; there's too much at stake in terms of potential fundamental surprises on Friday to make a major pre-USDA move either way," said Matt Zeller of StoneX in a note. Zeller adds that the WASDE will feature 'final' outlooks for last spring's crop.
Tussling Over Tariffs: Commodity futures in general caught support after a story from the Washington Post saying that potential Trump tariff measures may be more narrow than initially expected spurred a response from the incoming president via his Truth Social account. There, he said that "the story in the Washington Post, quoting so-called anonymous sources, which don't exist, incorrectly states that my tariff policy will be pared back… that is wrong."
Easing Outlook: Expectations for drought conditions in much of Argentina's crop-growing area are beginning to recede, said Daniel Flynn of Price Futures Group in a note. "The ensemble forecast models indicate the Argentine dryness will shrink following mid-January with the forecast calling for rain across southern and western provinces," Flynn said. "This would help 30-40% off all Argentine crop areas, but a widespread drought is becoming less likely." The potential for drought in Argentina has been a factor giving traders a reason to bid futures higher in recent sessions.
INSIGHT
Host of Factors: There's a number of things at play that would impact grain futures through the rest of the week. "Look for Argentine and Brazilian weather, ethanol usage, exports, expectations for Friday's WASDE report, farmer selling, currency fluctuations and the new administration's policies to all be the factors affecting prices," said Tomm Pfitzenmaier of Summit Commodity Brokerage in a note.
Backing Up: Export inspections of U.S. corn and soybeans fell back from the previous week, according to the latest USDA data. The agency said in its latest weekly Grain Export Inspections report issued Monday that corn export inspections for the week ended Jan. 2 totaled 847,463 metric tons - down from 907,565 tons reported last week. Meanwhile, soybean inspections totaled 1.28 million tons, down from 1.64 million tons reported last week. But inspections of corn and soybeans both remain ahead of last marketing year's pace, with corn inspections at 16.24 million tons for 2024/25, 24% higher than last year, and soybean inspections at 30 million tons, up 23% from last year.
AHEAD
--The EIA will release its weekly ethanol production and stocks report at 10:30 a.m. ET Wednesday.
--The USDA will be closed Thursday, in observance of the National Day of Mourning for President Jimmy Carter.
--The CBOT will close trading early Thursday, in observance of the National Day of Mourning for President Jimmy Carter. The market will close at 1:15 p.m. ET Thursday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
01-06-25 1522ET