By Kirk Maltais
--Soybeans for March delivery rose 1.1% to $13.61 1/2 a bushel on the Chicago Board of Trade Wednesday as traders continued to pile into soybeans on expectations of further demand rationing.
--Corn for March delivery rose 0.7% to $4.95 a bushel.
--Wheat for March delivery fell 1% to $6.47 1/2 a bushel.
Ration Reality: The rise seen in soybean prices over the past six months is seen as necessary for the market to grapple with the pressure of higher demand and constricted supply, said Joe Stone, head of Cargill's agricultural supply chain division. "The function of the market now seems to be rationing demand. We're just at the beginning of that process" said Mr. Stone, speaking on a virtual forum held by the U.S. Soybean Export Council. The weather in Argentina will dictate how the world soybean supply fares in 2021, he said.
Piling On: Corn futures on the CBOT traded higher Wednesday, making it 14 of the last 15 sessions that corn gained ground. Yet, corn futures failed to stay above the $5 per bushel level, after briefly breaching it in pre-market trading.
Back in Balance: Large investment funds are expected to do a major portion of portfolio rebalancing, which may cause buoyant CBOT futures to turn lower. "Index funds must rebalance to their stated portfolio objectives each January - some more frequently," said Arlan Suderman of StoneX. "This rebalance typically takes place the 5th - 9th trading day of the new year." With grain futures, particularly soybeans, gaining so much in the past year, funds may opt to dump their positions and move money into cheaper commodities - in an effort to rebalance the percentages certain goods make up their portfolios.
Growing Interest: U.S. soyoil exports are expected to jump this week, according to grains traders surveyed by The Wall Street Journal. Exports are expected to be anywhere from 20,000 metric tons to 65,000 tons - which is well up from normal expectations of anywhere from 5,000 tons to 30,000 tons. The uptick in soyoil sales coincides with rising vegetable oil prices in Asia. "China's palmoil and soyoil futures [have] scored new rally highs on tightening stocks," said AgResource. "The rise in domestic Chinese soy values is keeping soy crush margins positive." However, soybean exports are expected to be down from usual levels, with traders forecasting sales anywhere from 400,000 tons to 925,000 tons this week.
Ethanol Inventories Slide: Inventories of ethanol in the U.S. posted a drop this week for the first time since October. According to data released by the EIA Wednesday, ethanol inventories totaled 23.28 million barrels, which is down 220,000 barrels from last week. Meanwhile, ethanol production rose slightly this week, up 1,000 barrels per day to 935,000 barrels per day. After weeks of rising inventories and stalling weekly production figures, this week's report may be considered bullish among grains traders hoping to see ethanol fuel consumption pick back up.
--The USDA will release its weekly export sales report at 8:30 a.m. ET Thursday.
--Conagra Foods will release its fiscal second quarter 2021 earnings before the stock market opens Thursday.
--The CFTC will release its weekly commitment of traders report at 3:30 p.m. ET Friday.
Write to Kirk Maltais at email@example.com
(END) Dow Jones Newswires