Wheat Futures Extend Gains -- Daily Grain Highlights -March 19, 2024 at 03:12 pm EDT

By Paulo Trevisani

-Wheat for May delivery rose 1.8%, to $5.52 1/2 a bushel, on the Chicago Board of Trade on Tuesday, extending a rally stemming from escalation in the Russia-Ukraine conflict.

-Corn for May delivery rose 0.8% to $4.39 1/4 a bushel.

-Soybeans for May delivery fell 0.2% to $11.85 1/2 a bushel.

HIGHLIGHTS

European Tariffs: News reports that the E.U. will slap tariffs on Russian grain imports added support to wheat and corn futures. "The global supplies held by major exporters remain near multi-year lows," RCM's Doug Bergman said about wheat, in a report. That, combined with recent Russian attacks on Ukrainian grain facilities, "may be enough to spark greater short-covering from funds that are still short a lot of wheat," he said, adding that corn is "following the higher wheat market."

Sagging Beans: Soybeans futures tried to bounce back as demand for Brazilian production remains high. "Ideas that South American production is taking demand from the US have pressured futures lower," Price Group's Jack Scoville said in a note. Soybeans have been declining this week, after a bullish stretch earlier this month, while prices remain depressed compared to a year ago. "Funds remain very large shorts in the market," Scoville said. He added that forecast rains in Argentina would be beneficial for reproducing corn and soybeans.

INSIGHT

Trending Lower: Grain futures are likely to trend lower this year, amid declining geopolitical risk premiums and "the looming 2024/25 inventory overhang for row crops," Citi analysts said in a report. "Barring an adverse weather shock, we expect the staple cereals complex to revert to the 'low price and low vol' regime that sustained for a half-decade period," before the pandemic, they said. Citi sees corn ending 2024 at $3.75 a bushel, soybeans at $10.50 and wheat at $4.80.

Brazilian Currency: A weakening Brazilian currency is putting downward pressure on soybeans prices, AgResource said in a note. It matters for Brazilian farmers because "world soybeans are traded in dollar terms." AgResource added that Brazil's soybeans exports could be limited by increased domestic use of the grain in a diesel blend. Doubts about the size of Brazil's soybeans production are also having an impact on futures trade, as forecasts from the USDA and Brazil's CONAB diverge, AgResource said.

AHEAD

--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.

--The USDA will release its monthly Livestock Slaughter report at 3 p.m. ET Thursday.

--The USDA will release its monthly Cattle on Feed report at 3 p.m. ET Friday.

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

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

(END) Dow Jones Newswires

03-19-24 1511ET