Soybean Futures Turn Higher as Funds Return Amid Strong Fundamentals
By Kirk Maltais
--Soybeans for March delivery rose 2.4% to $13.43 1/2 a bushel
on the Chicago Board of Trade on Monday, with last week's
correction coming to an end as supply-demand fundamentals remain
--Corn for March delivery rose 2.2% to $5.11 1/2 a bushel.
--Wheat for March delivery rose 2.2% to $6.48 1/2 a bushel.
Bounceback: Corn and soybeans futures each fell more than 4%
Friday, a slide that was linked to managed money funds offloading
long positions. Daniel Flynn of Price Futures Group said the move
appeared to be temporary, with those same funds buying grain
futures Monday. "We all knew that was coming," Mr. Flynn said. "I
do remain wildly bullish long-term overall."
Ration Red Light: Export inspections of U.S. corn and soybean
were strong this week, providing support for grains as they
recovered from last week's selling. Corn inspections totaled 54.8
million bushels for the week ended Jan. 21, up from 36 million
bushels the previous week, while soybean inspections fell from last
week but still totaled 72.7 million bushels. "The fact that we
continue to see soybean sales means more rationing is needed in the
complex, not less," said Karl Setzer of AgriVisor.
Falling Short: While China bought more U.S. agricultural exports
in 2020 than the previous year, the purchases missed targets set by
the so-called phase one trade agreement under the Trump
administration. Covid-19 pandemic restrictions limited trade last
year, and data from the Peterson Institute of International
Economics showed Chinese purchases totaled $23.5 billion, below the
$36.6 billion goal. China also missed its targets for buying
manufactured goods and energy, according to the group. Market
followers are now watching to see how the Biden administration
reacts to China missing the targets. Last week, The Wall Street
Journal reported Beijing plans to pivot from trade issues to
climate change and the pandemic in an effort to ease tensions with
Trade Front: President Biden has said he plans to work with
allies to keep pressure on China, but at the World Trade
Organization the U.S. will be facing a rival in Beijing that has
become a more dominant force in recent years. Skepticism toward the
WTO in the U.S. translated into policies, such as blocking judges
to its top court, that have largely gutted its ability to serve as
an international arbiter of trade disputes. At the same time,
Beijing has cast itself as a defender of the WTO and its top court,
fueling its stature within the organization. "For the foreseeable
future, China will partake actively in WTO discussions and
initiatives, without offering major concessions at the negotiating
table," said Harvard University law professor and trade expert Mark
Advantage USA: Delays in the harvest of the Brazilian soybean
crop look to benefit U.S. soybeans on the export market. "Brazil
has harvested less than 1% of its soy crop, well below historical
averages due to latent seeding dates amid the September-November
drought," AgResource said. "The bulk of the Mato Grosso soy harvest
will not be occurring until the 3rd week of February." As a result,
Brazilian soybeans aren't likely to hit the export market in full
force until March, the firm predicts.
--Railway operator Norfolk Southern will release its
fourth-quarter earnings before the stock market opens
--The EIA will release its weekly ethanol production and stocks
report at 10:30 a.m. ET Wednesday.
--The USDA will release its weekly export sales report at 8:30
a.m. ET Thursday.
Chuin-Wei Yap contributed to this article.
Write to Kirk Maltais at email@example.com
(END) Dow Jones Newswires
January 25, 2021 16:15 ET (21:15 GMT)
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