By Kirk Maltais
--Wheat for March delivery fell 2% to $5.27 1/2 a bushel on the Chicago Board of Trade Monday, leading the ag complex lower as the U.S. dollar continues to rally.
--Corn for March delivery fell 0.6% to $4.25 1/2 a bushel.
--Soybeans for March delivery fell 0.4% to $10.60 a bushel.
HIGHLIGHTS
Bounce Back: The rebound in the U.S. dollar index, which rose 0.7%, made U.S. commodity exports less competitive on the world market. This is a bigger factor for U.S. wheat than for other grains like corn and soybeans. "Wheat is the most sensitive of grains to foreign exchange movements, as that commodity most impacted by global trends--which in the case of wheat is showing rising foreign output and rather limited demand," said Joel Karlin of Ocean State Research.
Price Leak: Lower energy futures, with crude oil down by over 5% to below $62 a barrel, pressured CBOT grains. Corn and soybeans are influenced by how crude oil trades, due to their usage as feedstocks for renewable fuels that are often blended with gasoline. But analysts and traders suspect that grain futures have little downside left, said Linda Meyer of Agrisource. "I talked to one broker who thinks there is underlying support near current levels," Meyer said.
Watering the Plants: Rainfall is expected to travel through areas of Argentina and Brazil this week, giving crops growing and being harvested a boost. For Brazilian soybeans, the rainfall is expected to help ensure a record harvest this year, said AgResource in a note. Brazilian consultancy AgRural says that the Brazilian soybean harvest is 9%-10% complete. A record influx of soybeans from Brazil are expected to pressure soybean prices on the export market, which is being reflected in most-active CBOT futures.
INSIGHT
Rate of Crush: Traders are gauging the potential for the USDA to report strong crushing data later Monday--which may show an increased rate of soybeans crushed through December, said RJO Futures in a note. "The average trade estimate of December U.S. soybean crush is 230.4 million bushels," said the firm in a note, "up from November crush of 220.5 million and 5.8% above year ago Dec. crush of 217.7 million bushels." The crush data will be a focus for many as the market keeps a close eye on what the government does with rules around biofuels. Corn growers are pushing for regulations to allow nationwide E15 sales, while other traders are looking for clarified rules around the 45Z clean fuel production tax credit.
Adding Length: The CFTC Commitments of Traders report on Friday showed a big jump in corn and soybean long positions among fund traders. For the week ended Jan. 27, fund traders added over 10,400 long contracts in corn, and just over 7,000 longs in soybeans. Traders remain net short in corn by roughly 72,000 contracts, while are now net long in soybeans by just over 17,300 contracts. The added long positions suggest that traders increasingly see higher grain futures ahead.
Keeping the Doors Open: CBOT grain futures are lower in morning trade, losing ground even though the USDA is unaffected by the partial government shutdown. A spokesperson for the USDA says that the agency is funded through the rest of the fiscal year, meaning that data is expected to continue being issued as scheduled. The partial shutdown is expected to conclude with a deal this week.
AHEAD
--Archer Daniels Midland Co. will release its fourth-quarter 2025 results before the stock market opens Tuesday.
--Corteva Inc. will release its fourth-quarter 2025 results after the stock market closes Tuesday.
--Bunge Global SA will release its fourth-quarter 2025 results at 6 a.m. ET Wednesday.
--The EIA will release its Weekly Petroleum Status Update report at 10:30 a.m. ET Wednesday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
02-02-26 1459ET
