Wheat for December delivery fell 1.4% to $5.64 3/4 a bushel on the Chicago Board of Trade on Monday on questions for the need for higher prices to cover the potential of war-related supply disruptions amid the expectation that the incoming Trump administration will help broker peace between Russia and Ukraine.
-- Soybeans for January delivery fell 0.8% to $10.22 a bushel.
-- Corn for December delivery fell 0.4% to $4.29 1/2 a bushel.
HIGHLIGHTS
War Expenses: The war premium in wheat futures on worries of Black Sea or Middle East supply disruptions is being taken out of the market because of increasing hopes of peace, said Linda Meyer of AgriSource. Rainfall seen in both Russia and the U.S. Plains is also pressuring wheat futures, which in turn is weighing on corn and soybeans, Meyer said.
Friendlier Outlook: Rainfall in the U.S. Plains also pressured wheat trading.
"I think the arrival of some good moisture in many areas of the Plains last week with some sections getting over 4 inches," said Joel Karlin of Ocean States Research.
Improved rainfall means a better outlook for crops crippled by extreme drought conditions.
The USDA is closed in observance of Veterans Day, and is scheduled to release its Crop Progress Report on Tuesday.
Robust Dollar: Extended strength in the U.S. dollar index pressured the agricultural complex and other commodities.
For grains, the stronger dollar affects the competitiveness of U.S. grain exports on the world stage.
Traders are watching to see how this translates to China's export demand going forward.
"China still has very little coverage on for December and January shipment," said Arlan Suderman of StoneX in a note. "Will it now aggressively buy to fill those needs, or will it draw from its vast reserves to carry it over until new-crop Brazilian supplies are available?"
INSIGHT
World-Wide: Grain traders took Friday's WASDE report as confirmation that the world supply situation for corn and soybeans remains onerous.
"When looking at the ending stocks balance sheet, supplies are still ample from a historical perspective," said Naomi Blohm of Total Farm Marketing in a note.
The USDA did report reductions to the ending stocks of both U.S. corn and soybeans, and corn is now at 1.94 billion bushels and soybeans 470 million bushels.
Uncertain Times: The incoming administration of President-elect Trump has begun to take shape, with announcements of top-level cabinet appointments.
For agriculture, traders and analysts continue to have a host of uncertainties regarding what the Trump trade policy will ultimately be, especially as it pertains to China.
"My top question would be if he is going to enforce the Phase 1 agreement from his last presidency," said Karl Setzer of Consus Ag Consulting. "The Biden administration never really did and it's been kinda forgotten about."
Money Flow: Commodity categories across the board saw higher flows of open interest for the week ended Nov. 8, with the exception of precious metals, according to data from JPMorgan Global Commodities Research.
Grain and oilseed futures saw the largest percentage uptick for the week, with open interest rising by approximately 5% to around $185 billion.
Friday's WASDE report from the USDA was a factor spurring increased investment in agriculture because of yield cuts in the report.
AHEAD
-- The USDA is closed in observance of Veterans Day. It will reopen Tuesday.
-- Mosaic Corp. is scheduled to release its third-quarter earnings report before the stock market opens Tuesday.
-- Tyson Foods Inc. is due to release its fourth-quarter earnings report at 7:30 a.m. EST Tuesday.
-- The USDA is scheduled to release its weekly grains export inspections report at 11 a.m. EST Tuesday.
-- The USDA is due to release its weekly Crop Progress Report at 4 p.m. EST Tuesday.
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