On Tuesday, March 11, the CBOT grain futures market showed mixed trends. Soybean futures fell for the third consecutive day, with the most active contract at $10.10-3/4 per bushel, down 0.3%, as concerns about demand continued to pressure the market. Wheat and corn futures also faced pressure, declining 0.6% to $5.59-1/4 per bushel and 0.2% to $4.71 per bushel, respectively. The market's focus is on the upcoming USDA monthly supply and demand report, as well as the impact of droughts in key production areas in the U.S. and Russia on crop prospects.
Wheat: Limited Support from Drought, Weak Exports Pressure
The wheat market is caught between drought themes and weak exports. On March 10, wheat futures rose to $5.78-1/2 per bushel, the highest since late February, but fell back to $5.59-1/4 per bushel on Tuesday, reflecting profit-taking. Drought in the U.S. Plains hard red winter wheat region is worsening, with limited rainfall expected in Kansas over the next two weeks, which may affect crop growth. However, the USDA weekly report indicates that U.S. wheat export inspections last week were only 216,000 tonnes, far below market expectations, and record wheat production in India may further weaken U.S. wheat competitiveness.
Soybeans: Weak Demand Continues to Pressure
Soybean futures fell to a near-week low of $10.10 per bushel as the market holds a pessimistic view on demand prospects. USDA data shows that U.S. soybean export inspections last week were 844,000 tonnes, within the high range of expectations, but private sales were only 195,000 tonnes, indicating cautious buyer purchases. Fund position data shows that on March 10, funds net sold 6,500 soybean futures, indicating a shift in market sentiment to bearish. In the spot market, March CIF soybean barge quotes at the Gulf of Mexico relative to May futures narrowed to a premium of 74 cents, further confirming weak demand.
Soybean Oil: Ample Supply, Pressure on the Market
The soybean oil market continued to be weak, with robust domestic crushing activity in the U.S. leading to ample supply, while weak export demand limited price rises. Fund position data shows that on March 10, funds net sold 5,500 soybean oil futures, with net short positions continuing to increase, reflecting strong bearish market sentiment. In the short term, soybean oil futures may continue to fluctuate at low levels, lacking a clear bullish catalyst.
Soybean Meal: Coexistence of Supply Pressure and Weak Demand
The soybean meal market is constrained by weak global feed demand. May soybean meal futures closed down $1.90 to $302.50 per short ton on Monday, continuing the weakness on Tuesday. USDA reports show that the Iranian SLAL's bid to purchase 120,000 tonnes of soybean meal still has no new progress, indicating that recovery in international market demand is slow. Fund position data shows that on March 10, funds net sold 3,500 soybean meal futures, and net shorts expanded to 12,000 contracts over 30 days, with limited short-term upward momentum.
Corn: Strong Exports Support Price
Corn futures remained relatively strong, with May corn futures rising 2-1/2 cents to $4.71-3/4 per bushel on Monday and a slight decline to $4.71 per bushel on Tuesday. USDA data shows that U.S. corn export inspections last week reached 1.8 million tonnes, exceeding market expectations, with private sales of 126,000 tonnes to Japan, further boosting market confidence. In terms of fund positions, March 10 saw funds net buy 3,500 corn futures, with a total net long increase of 32,000 contracts over the past five trading days, indicating a strong short-term bullish outlook.
Market Outlook
The short-term trend of CBOT grain futures is expected to remain mixed. Wheat may maintain range-bound fluctuations with support from drought expectations, but abundant global supply and weak exports limit upward movement. Soybeans and soybean oil, impacted by weak demand and oversupply, are unlikely to break out of their weak positions in the short term, pending whether the USDA report provides a turning point. The soybean meal market is expected to be range-bound around $300 per short ton, with attention to be paid to whether feed demand shows signs of recovery. Corn, with strong export performance and anticipated inventory reductions, has the strongest short-term upward momentum and may challenge the $4.80 per bushel level. Investors need to closely monitor the USDA report and global weather changes for further market impacts.
