Overall Weakness in the CBOT Grain Market, Lacking Strong Upward Momentum
On Monday (December 16), the CBOT grain futures market displayed characteristics of a technical adjustment, influenced by a sluggish U.S. domestic market before the holidays and uncertainty in international demand. Closing data from last Friday (December 13) showed fluctuations in corn, soybean, and wheat futures prices, but the market as a whole lacked upward momentum.
- Corn Futures stood at 4.42 cents/bushel, with a slight weekly increase of 0.45%.
- Soybean Futures closed at 9.88-1/4 cents/bushel, with a weekly decline of 0.55%.
- Wheat Futures stood at 5.52-1/4 cents/bushel, with a weekly decrease of 0.9%.
Corn Market: Weak Export Sales but Tight Inventory Limits Downside
The corn market showed some resilience last week. CBOT March corn futures once reached a six-month high of 4.51-1/4 cents/bushel. However, the latest USDA export report showed net corn sales of 946,900 tons for the week, below the expected 1.1 million tons, leading to a price retreat.
Nevertheless, the market remained supported by the decline in U.S. corn inventories to 1.738 billion bushels, limiting short-term downside risks. Additionally, data on fund flows indicated an increase in speculative net long positions, suggesting confidence in the market's future performance.
Soybean & Related Markets: Demand Concerns Drag Prices Down
The soybean market faces multiple pressures. Profit-taking in soybean meal and oil futures dampened soybean prices, while a weak domestic basis further suppressed any price rise. Last Friday, CIF soybean barge prices were 88 cents/bushel above CBOT January soybean futures, with FOB prices remaining at 109 cents/bushel.
Although the USDA confirmed a batch of soybean export orders last week, including 534,000 tons to undisclosed destinations, uncertainties about future demand from China and Canada weakened market confidence. Furthermore, China's record grain production and policy changes exacerbated long-term demand uncertainties.
In the short term, the soybean market requires more positive news (such as new export orders or weather events) to break the current deadlock.
Wheat Market: Weak Exports Weigh on Prices
Wheat futures have been weak recently. March hard red winter wheat futures fell to 5.56 cents/bushel last Friday, affected by sluggish global export demand. USDA data showed wheat export sales of 378,200 tons for the week, meeting expectations but offering little excitement.
Analysts note a stagnation in global wheat demand, with buyers delaying procurement decisions. Future wheat prices could be influenced by external factors, including the impact of the Russia-Ukraine situation on Black Sea exports and weather changes in major production areas.
Soybean Meal and Oil Market: Profit-Taking and Weak Demand Dominate
Soybean meal and oil markets continued to be influenced by profit-taking last week. January soybean meal futures closed at $286.70/short ton, and CBOT January soybean oil futures also faced pressure. Thin market trading and expectations of a slowdown in both domestic and international demand were the main reasons for the price correction.
Speculative positioning data showed an increase in net short positions in soybean meal and oil over the past 30 days, reflecting a pessimistic market sentiment.
Market Outlook: Focus on Supply, Exports, and Weather Changes
Overall, the CBOT grain market lacks clear driving factors, with traders primarily adjusting their positions based on export data. Key future market focuses include:
- Export Sales Data: Particularly regarding demand in Asian and African markets.
- Global Supply Changes: Inventory tightness and supply conditions in major production areas will continue to influence prices.
- Weather Factors: Extreme weather may bring new market volatility.
Despite the current sluggish trading, speculative capital inflows and global supply constraints provide support for some commodities; the market may see short-term fluctuations based on positive external news.
