Soybean Futures Slide on Brazilian Rains in Thin Trade — Daily Grain Highlights

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By Paulo Trevisani

 

–Soybeans for March delivery dropped 2.2% to $13.38 1/2 a bushel on the Chicago Board of Trade on Thursday amid low volume and bearish weather in South America.

–Corn for March delivery fell 1.6% to $5.96 a bushel.

–Wheat for March delivery fell 1% to $7.79 3/4 a bushel.

 

HIGHLIGHTS

 

Rain Muddies Soy: AgResource attributed the soybean slide to overnight rain in Brazil’s farm states of Parana and Mato Grosso do Sul, which have been suffering from crop-damaging dry conditions. “The CBOT is extracting weather premium in a correction,” AgResource said. “Thin holiday volume exacerbates CBOT rallies/declines,” the research firm said. On a bullish note, AgResource said considerable yield damage to Brazilian crops has already been assessed, and Iraq is expected to import more wheat, making Thursday’s break “a buying opportunity in soyoil, corn and KC wheat.”

Weather Watch: Grain traders studied weather patterns in both North and South America. “The U.S. [weather] situation seems to be improving while Argentina’s weather pattern is still negative with net drying amid above normal temperatures for the balance of this week,” Futures International’s Terry Reilly said. “Heavy rain is still a concern for center west and center south Brazil crop areas in the coming 10 days and the situation will be closely monitored for possible impacts on crop conditions and harvest progress.”

 

INSIGHT

 

Bullish on Beans: With the soybean market overbought, Thursday’s pullback wasn’t a big surprise, Summit’s Tomm Pfitzenmaier said. “However, if the South American weather does not improve, we would expect traders and funds to once again be strong buyers of soybeans” in 2022. “Longer term we expect South American weather concerns to support the soybean market on weakness with the potential for La Nina bringing drier conditions over the next few weeks,” he said, adding that prices could push as high as $14.45 a bushel.

Cost Threatens Corn: Traders are discussing corn acreage estimates amid rising production costs, AgriVisor said. “At first it was thought corn acres would decrease by a considerable amount this year, but some analysts have started to lower their loss estimates.” The consulting firm said that any acreage loss is likely to be confined to regions where production has struggled in the past few years. “One factor that could impact U.S. plantings more than anything this coming spring is financing,” AgriVisor said. “The high input costs are starting to eat into some producers’ operating loans.”

 

AHEAD

 

–The Chicago Board of Trade will close trading early on Friday, reopening next week.

–The USDA will be closed Friday in observance of New Year’s, reopening next week.

 

Write to Paulo Trevisani at paulo.trevisani@wsj.com

(END) Dow Jones Newswires

December 30, 2021 15:30 ET (20:30 GMT)

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