By Kirk Maltais 
 

--Wheat for March delivery fell 2.3% to $7.77 a bushel on the Chicago Board of Trade Thursday, with concerns about the Russia-Ukraine situation as well as the Federal Reserve's plan to raise rates sending the U.S. dollar surging, which typically affects the appetites of buyers for U.S. grain exports.

--Corn for March delivery fell 0.3% to $6.25 1/4 a bushel.

--Soybeans for March delivery rose 0.6% to $14.48 1/4 a bushel.

HIGHLIGHTS

No Pulling Punches: The U.S. dollar jumped Thursday, with the ICE index posting one of its biggest gains since March 2020. This put pressure on CBOT grains--particularly wheat. "U.S. wheat futures are lower on follow-through selling and the USD screaming higher," said Terry Reilly of Futures International. However, strong export sales reported by the USDA Thursday acted as a counterweight to this pressure. In its weekly report, the USDA said that export sales of wheat in the 2021/22 marketing year totaled 676,700 metric tons--a marketing-year high.

Dried Out: Brazilian soybean exports will decline slightly in 2022 from 2021 because of a drought that has reduced productivity in some states, according to agricultural consultancy Safras & Mercado--providing U.S. soybean futures with some support. The group cut its forecast for exports this year to 85.5 million metric tons of the oilseeds from its previous forecast of 90 million tons. In 2021, Brazil exported an estimated 86.1 million tons, Safras said. Analysts have been reducing their forecasts for soybean production in the 2021-2022 growing season for weeks as the drought in the southern states has continued.

INSIGHTS

Fund Direction: In recent trading sessions, grain futures have been affected largely by movement of money by large investors--who see commodities as a whole as a safe haven amid concerns about inflation. "Managed money investors have started to carry more commodities in their portfolios which has been beneficial for corn, soybean, and wheat values at times," said Karl Setzer of AgriVisor. "This has also caused an increase in market volatility with futures rallying then selling off with no traditional fundamental reason." According to the last CFTC weekly report, managed money is carrying large long positions across all grains, particularly corn.

Slowed Pace: China's Lunar New Year, which begins Feb. 1 and lasts through Feb. 15, is going to slow down the pace of U.S. grain exports as China stays out of the market while on holiday. The absence of China from the export market may be noticeable, said AgResource. "China this week has been moderately active in securing spot beans from Brazil and new crop supplies from the U.S.," said the firm. Trading of soybeans and soy products on the CBOT has been supported by a slimming picture of South American soybean supplies.

AHEAD:

--The CFTC will release its weekly commitment of traders report at 3:30 p.m. ET Friday.

--The USDA will release its weekly grains export inspections report at 11 a.m. ET Monday.

--The USDA will release its monthly grain crushings report at 3 p.m. ET Tuesday.

Jeffrey Lewis contributed to this article.

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

(END) Dow Jones Newswires

January 27, 2022 15:23 ET (20:23 GMT)