By Kirk Maltais

--Corn for March delivery fell 0.3%, to $6.69 1/2 a bushel, on the Chicago Board of Trade on Tuesday, with traders noncommittal as they waited for more signals that unrest in China was abating.

--Wheat for March delivery rose 0.1% to $7.81 1/2 a bushel.

--Soybeans for January delivery rose 0.2% to $14.59 1/2 a bushel.

HIGHLIGHTS

Stuck in the Middle: Grain traders found little reason to make big moves in grains today, as markets across the board became more hopeful that China can further loosen Covid-19 restrictions following nationwide protests there. For corn, the lack of direction meant a mostly lower trading session. "Corn is having a tough time following through, either on the downside, or on the upside," said Charlie Sernatinger of ED&F Man Capital. "But when we are already right at what should be the average price for the season, we don't have a lot of momentum that can be generated from this price level."

Hot Spell: Abnormally warm weather in Argentina is raising concerns about the soil moisture there, and how it may adversely impact crops. The country's crop-growing regions were dry over the weekend, and will briefly see some isolated showers before going back to hot conditions. "Dryness and drought continue to be concerns until showers become more consistent," said DTN in a note. This outlook provided support for CBOT soybeans throughout the day, due to Argentina being in the process of seeding its soy crop now.

INSIGHTS

Gradual Building: Hedge funds are growing their short positions in U.S. wheat futures, this after Russia and Ukraine reached a deal earlier this month to continue the Black Sea grain export deal. According to the CFTC's latest Commitment of Traders report, short positions of soft red winter wheat reported by managed money funds rose by over 6,500 contracts through the week ended November 22 - bringing their total position to net short roughly 53,400 contracts. Funds also grew their short positions in spring wheat and hard red winter wheat for the week.

Defying Gravity: Even with hedge funds picking up more short positions and open interest in agricultural futures falling for a third consecutive week, analysts with JPMorgan Global Commodities Research are forecasting that prices for grains will rise through the first quarter of 2023. "Fundamentals continue to drive our bullish risk bias across agri markets, and our price forecasts call for a rise across the board," said the firm in a note. JPMorgan also adds that a mild U.S. recession later in the year may curb some of agriculture's upward momentum. The firm reports that for the week ended November 25, open interest in agricultural futures fell by 1%, or $3.8 billion, to $284.1 billion.

Back Tracking: Daily ethanol production in the U.S. is expected to pull back in this week's report from the EIA, according to analysts surveyed by Dow Jones this week. Analysts forecasted production at a range between 1.025 million barrels per day and 1.052 million barrels per day, with most hedging towards the lower side of the range. Last week, the EIA reported that average daily ethanol production hit 1.041 million bpd. Meanwhile, analysts are forecasting a 200,000-barrel move in either direction for inventories, with a range of 22.63 million barrels to 23.01 million barrels.

AHEAD

--Hormel Foods Corp. will release its fourth-quarter earnings report before the stock market opens Wednesday.

--The EIA will release its weekly ethanol production and stocks report at 10:30 a.m. ET Wednesday.

--The USDA will release its monthly agricultural prices report at 3 p.m. ET Wednesday.

Write to Kirk Maltais at kirk.maltais@wsj.com

(END) Dow Jones Newswires

November 29, 2022 15:24 ET (20:24 GMT)

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