Wheat Rises as Geopolitics Spark Short-Covering - Daily Grain Highlights
By Kirk Maltais
--Wheat for March delivery rose 3.7% to $7.69 a bushel on the
Chicago Board of Trade Tuesday as tensions emanating from Russia's
troop buildup at the Ukraine border led to a wave of short-covering
by grain traders.
--Corn for March delivery rose 0.6% to $5.99 1/2 a bushel.
--Soybeans for March delivery fell 0.6% to $13.61 1/4 a
Tensions Rising: After four rounds of talks failed to narrow the
gap between Moscow and Western nations regarding Russia's buildup
of troops and military equipment at the Ukraine border, wheat
futures rose in trading Tuesday. This, along with dry weather
hurting winter wheat crops in the U.S. plains provided support for
wheat, leading funds to engage in strong short-covering. "The truth
is, the market was begging for some short covering," said Charlie
Sernatinger of ED&F Man Capital.
Good Soak: Wetter weather in South American growing regions put
pressure on CBOT corn and soybean futures Tuesday. "The weather
forecast in South America looks a little better than it did on
Friday, so markets are setting back a bit," said Tomm Pfitzenmaier
of Summit Commodity Brokerage. Mr. Pfitzenmaier adds that weakness
in overall macro markets today also contributed to the pressure
seen on these futures - with the U.S. dollar index on the
Intercontinental Exchange climbing again Tuesday.
Ravenous Demand: Soybeans crushed in the U.S. hit a
higher-than-expected rate in December, according to the National
Oilseed Processors Association. In its latest report, NOPA said
that soybeans were crushed at a rate of 186.4 million bushels. This
is 1.4 million bushels more than expected by traders, said Terry
Reilly of Futures International. It's also up from the previous
month's rate, as well as 183.2 million bushels at this time last
year. "We see this report bearish for [soybean oil] and supportive
for soybeans," said Mr. Reilly.
Faster Pace: Inspections of U.S. soybean exports have nearly
doubled from the previous week, according to USDA data. In its
latest weekly report, the USDA said soybean inspections for the
week ended Jan. 13 totaled 1.72 million metric tons, up from
985,455 tons reported last week but down from 2.32 million tons
reported at this time last year. Shipments to China comprised a
large portion of this week's inspections for soybeans - with
868,727 tons being reported by the USDA. Inspections for U.S. corn
and wheat were also higher for the week.
--The EIA will release its weekly ethanol production and stocks
report at 10:30 a.m. ET Thursday.
-The USDA will release its monthly livestock slaughter report at
3 p.m. ET Thursday.
--The USDA will release its weekly export sales report at 8:30
a.m. ET Friday.
-The USDA will release its monthly Cattle on Feed report at 3
p.m. ET Friday.
--The CFTC will release its weekly commitment of traders report
at 3:30 p.m. ET Friday.
Write to Kirk Maltais at firstname.lastname@example.org
(END) Dow Jones Newswires
January 18, 2022 15:51 ET (20:51 GMT)
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