Soybeans Drop as Profit Taking Extends
By Kirk Maltais
--Soybeans for March delivery fell 2.2% to $13.85 3/4 a bushel,
on the Chicago Board of Trade Tuesday, with managed money funds
extending their selling of grains futures for a second straight
--Corn for March delivery fell 1% to $5.26 a bushel.
--Wheat for March delivery fell 0.5% to $6.72 1/4 a bushel.
Offloading: Grain futures trading on the CBOT were down across
the board Tuesday. Selling came largely from managed money, which
took profits as grains are still perched on multi-year highs.
Midday, managed funds were net sellers of 2,000 contracts of soft
red wheat; 15,000 contracts of soybeans; 2,000 contracts soyoil,
6,000 contracts of soymeal and 6,000 contracts of corn, according
to Archer Financial Services.
Mixed Messages: Prices for wheat across the world rose yesterday
while the U.S. was closed in observance of Martin Luther King Jr.
Day - something reflected by CBOT wheat prices in pre-market
trading this morning before dipping lower throughout the day. Even
so, wheat futures didn't suffer the same drop as corn or soybeans.
"Supported by cold weather in Russia, where the young crops had a
difficult start and are therefore in quite sensitive condition,
prices were further driven up by the Russian export tax," said
Commerzbank. "The prospect of lower Russian exports at a time when
less EU wheat is also available than last year is cause for concern
for traditional importers such as Egypt and Algeria."
No Slowdown: Since the release of the USDA's WASDE last week,
U.S. grain prices have been rising amid expectations that higher
prices are needed to "ration" demand. Even so, the USDA confirmed
new large sales Tuesday. 132,000 metric tons of soybeans have been
sold to China for delivery in the 2021/22 marketing year, 128,000
tons of corn have been sold to Japan for delivery in 2020/21, and
Israel purchased 100,000 tons of corn for 2020/21. High prices are
not stifling export demand, but may still falter short-term. "Corn
continues to be supported by firm global prices with the U.S.
competitively priced," said Doug Bergman of RCM Alternatives. "With
that said, the funds are extremely long, so any sign that export
bids are cooling could lead to a large pull-back."
Climate Watch: The La Nina climate condition seen throughout
this winter is expected to continue into the spring - but how
strong it is could have notable effects on winter wheat crops and
planting conditions for spring row crops. In a virtual forum
Tuesday, meteorologists with DTN forecast that the current La Nina
climate has so far kept winter warm in most areas of the country,
reducing national heating demand and limiting snowfall. However, if
La Nina weakens in the coming months, then winter wheat crops could
be exposed to a round of heavier snowfall - and temperatures on the
colder side heading into the spring planting season.
Brazil Weakness: A profit warning from one of the top pesticide
makers sent jitters across the agricultural sector Tuesday. FMC,
one of the world's largest insecticide and herbicide producers,
cuts its projection for fourth-quarter profits by about 16%,
pointing to factors including lower-than-projected sales in Brazil
due to severe drought in southern hemisphere's crop heavyweight.
Brazilian farmers' problems have helped boost crop prices, a boon
to U.S. farmers, but their struggles could raise concerns for farm
chemical conglomerates that are relying more and more on South
--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.
Jacob Bunge contributed to this article.
Write to Kirk Maltais at email@example.com
(END) Dow Jones Newswires
January 19, 2021 15:05 ET (20:05 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.