Grains ended mixed on Monday with soybeans reversing a lower opening and bouncing off chart support areas at 8-month lows. March soybeans were 7 ¾ cents higher. Brian Grete, editor of Pro Farmer, says, “It was mostly corrective buying as funds have built a short position in soybeans and may be covering some of those contracts heading into the WASDE report on Thursday.” He says stronger weekly export inspections at 52.4 million bushels also helped bring some buying interest back into the market.
March corn was unchanged caught between the push back higher in soybeans and the lower day in wheat. Corn has been sideways between about $4.40 and $4.50, and Grete says is looking for a bullish catalyst to break out of that range and get the funds to start covering their massive short position in corn. “Maybe it’s that Brazil safrinha production, maybe it comes from the demand side of things where the market says hey, we finally have enough global end user demand now that prices are cheap enough. We definitely haven’t seen that yet, but I think one of those two things has to happen for corn to put in a major low and start to move appreciably higher.”
Wheat futures set back in all three classes in response to the higher U.S. dollar index and prices for Chicago wheat ran up into chart resistance. Plus, Grete says with soybeans higher funds may have been position squaring. “Let’s be honest this market environment right now just isn’t conducive for broad based short covering. So, wheat kind of drew the short straw so to speak to start out the week.”
Grete says grain markets all saw some positioning ahead of the WASDE report Thursday although he isn’t expecting much change in the domestic balance sheets. He says South American production estimates will be more widely watched and Conab also releases Brazil estimates on Wednesday. “USDA is behind on Brazil from the private estimates and has been slow to make adjustments,” he says.
