Corn Falls as Funds Liquidate Sizable Long Positions
By Kirk Maltais
--Corn for May delivery fell 1.7% to $5.38 1/4 a bushel on the
Chicago Board of Trade Monday as fund ook the opportunity to sell
their long positions.
--Wheat for May delivery fell 1.5% to $6.50 1/4 a bushel.
--Soybeans for May delivery fell 0.9% to $13.91 1/4 a
Long Liquidation: Grain futures are lower with the primary
driver being managed money funds liquidating long positions, said
AgResource. According to the firm, an estimated 10,500 contracts of
corn were sold by funds as of mid-day, while 5,400 contracts of
wheat and 2,200 contracts of soybeans were also sold. On Friday,
the CFTC said for the week ending Feb. 23, fund long positions in
soybeans grew nearly 10,000 contracts to nearly 160,000 contracts.
Meanwhile, positions on corn stayed largely long at 345,000
Uncertainty Sprouts: Several factors are at play sowing
uncertainty in the grain markets with much of it coming from China.
Large grain demand is still expected, but an uptick in new African
swine fever cases may derail the country's efforts in rebuilding
pork supplies. If that does happen, it's expected to take a large
bite out of the country's need for soybeans. Other factors, such as
U.S. weather during the growing season and the outlook for South
American crops, also moved CBOT futures. "Price performance in the
next few weeks could prove erratic in view of the many
uncertainties," said Commerzbank.
Bumper Crop: Estimates released by StoneX over the weekend show
a larger than expected soybean crop in Brazil, while figures for
the corn crop continue to shrink. StoneX sees Brazilian soybeans at
133.48 million metric tons, up from 132.77 million tons last month.
Meanwhile, its outlook for corn is down to 108.5 million tons from
110.22 million tons the previous month. "This week's weather
outlook remains quite wet in Brazil's northern belt, while
continuing to lean warm and dry in Argentina," said Arlan Suderman
Jiffy Pop: Inspections of U.S. corn exports jumped this week,
driven mostly by higher shipments to China and Japan. In today's
export inspection report, the USDA said U.S. corn totaled 1.64
million metric tons for the week ending Feb. 25. That's up from
1.27 million tons the previous week. Of that amount, nearly 347,000
tons were inspected for shipment to China, while nearly 343,000
tons were inspected for shipment to Japan.
Show Me The Money: Nearly 90% of US farmers report that their
primary income doesn't come from their farm, says Agricultural
Secretary Tom Vilsack during a virtual interview with the National
Farmers Union -- something that the USDA hopes to address in the
course of the Biden administration. "If we're going to turn things
around... we're going to have to work so farmers don't make money
just off of the sale of commodities," said Vilsack. Other potential
revenue streams the agency wants to make available to farmers
include carbon sequestration and investing in new technology to
monetize waste products like manure.
--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.
--USDA and Statistics Canada release its biannual reports on
cattle, sheep, and hog herds at 3 p.m. ET Thursday.
Write to Kirk Maltais at firstname.lastname@example.org
(END) Dow Jones Newswires
March 01, 2021 15:48 ET (20:48 GMT)
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