By Kirk Maltais
--Soybeans for March delivery fell 1.2% to $13.69 1/2 a bushel on the Chicago Board of Trade Wednesday, recovering from a steeper drop earlier in the day as managed money slowed their selling of grains futures.
--Corn for March delivery fell 0.8% to $5.22 a bushel.
--Wheat for March delivery fell 0.7% to $6.67 3/4 a bushel.
Rocky Start: Row crop futures cut their losses after a bruising morning that saw prices fall more than 2% on fund selling. "Speculative excesses have been curtailed as March corn fell below $5.20 [per bushel] and March soybeans reached near $13.50 [per bushel] as short-term momentum funds sold out a portion of their long holdings," said AgResource. The firm estimated midday that managed money firms sold 13,100 contracts of soybeans, 18,400 contracts of corn and 6,100 contracts of wheat.
Weather Watch: Weather was the other major factor pressuring grain futures Wednesday. "After the better-than-expected rains on the weekend in Argentina, the market has collapsed [which] seems to signal that that is the reason we have rallied," said Marex Spectron. Southern areas of Brazil are expected to receive more scattered rainfall through Sunday, according to DTN. The current weather pattern may allow for more robust crops to survive and hit the market.
China Hardline: Comments from President Biden's nominee for Treasury Secretary, Janet Yellen, at her confirmation hearing yesterday were another factor weighing-down futures Wednesday. Mizuho Americas said this morning Yellen's comments that "the U.S. is prepared to take on China's 'abusive' trade and economic policies" helped push the agricultural complex lower. Mizuho said the testimony suggests "the Biden administration may continue some of Donald Trump's tough policies on China."
Growing Acres: With grain futures high even as they shed the big gains they made after last week's WASDE report, farmers are expected to plant more acres of soybeans and corn. "There will be many factors weighing in, with a lot of trade days left in January," said Daniel Flynn of Price Futures Group. According to Mr. Flynn, the high prices seen for row crops will drive an uptick in acreage. Last year, 90.8 million acres of corn were planted, while 83.1 million acres of soybeans were sown, according to USDA data. Both of these figures are slightly higher than the previous crop year.
Methane Strain: Other countries are likely to follow New Zealand's move to charge for on-farm emission, which should ramp up pressure on agriculture producers to reduce emissions, said Fitch Solutions. The firm believes the EU is highly likely to introduce similar policies by 2030, in particular bringing agricultural methane emissions into greenhouse gas regulations. "For Canada, the U.S. and Australia, the chance of more stringent regulation is medium. For now, we expect these markets to focus on incentivizing innovation, although emissions pricing or limits could be introduced as the deadline for climate goals draws closer, with significant effects on the livestock industry."
--The USDA will release its weekly export sales report at 8:30 a.m. ET Thursday.
--Railroad operator Union Pacific will release its fourth-quarter 2020 earnings at 8:45 a.m. ET Thursday.
--The EIA will release its weekly ethanol production and stocks report at 10:30 a.m. ET Thursday.
--Lucy Craymer contributed to this article.
Write to Kirk Maltais at email@example.com
(END) Dow Jones Newswires