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 strong.

--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.

 

HIGHLIGHTS

 

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.

 

INSIGHT

 

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 the U.S.

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 Wu.

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.

 

AHEAD

 

--Railway operator Norfolk Southern will release its fourth-quarter earnings 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 weekly export sales report at 8:30 a.m. ET Thursday.

 

Chuin-Wei Yap contributed to this article.

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

(END) Dow Jones Newswires

January 25, 2021 16:15 ET (21:15 GMT)

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