Grains closed higher on Tuesday:

Corn + 3 ½ cents/bu (Mar @ 4.43 ½ )

Soybeans + 4 cents/bu (Jan @ 12.47 ¼ )

Chi Wheat + 5 ¾ cents/bu (Mar @ 6.17)

Cdn $ -0.00435 (77.58 cents)

WTI Crude Oil -0.95/barrel (47.02)

Another day of higher final price settlements on grain futures on Tuesday.  Markets continue to rally on tight USA supply concerns, and potential weather issues in South America, although sellers to seem to be more willing to step forward in recent trading sessions.  Of course, as worldwide COVID-19 infections continue to soar, and a new variant of the virus is discovered in the UK, the fear of demand destruction due to extended lockdowns to control the virus are starting to build.

March corn futures posted a new contract high, as spot export offers were up 5 cents/bu and funds were thought to be aggressive buyers.  On the negative side of the ledger, October driving miles in the USA were pegged at 9% lower than a year ago, in line with reductions seen in August and September.  Unfortunately, the USDA is forecasting year over year ethanol demand to be up 4%, so the projected corn use for ethanol in current Supply and Demand tables is likely overstated.  The question all traders are asking is, can Chinese demand offset the reduction in ethanol consumption?

Soybean futures traded both sides of unchanged today, and spent more time in negative territory than in recent sessions.  The lack of any new USDA Flash Sale announcements is a big reason for weakness, as are the aforementioned COVID-19 fears.   But ultimately, buyers were once again willing to step in and support any price drops by buying.  China’s COFCO pegged Chinese soybean import interest in soybeans at over 100 million tonnes today.  Chinese soybean futures rallied another 60 cents/bu today, which was also supportive to USA values.

Wheat prices had a nice close after being down more than 10 cents/bu earlier in the day.  Much of the USA hard red winter wheat crop is suffering in dry soils, with little snow cover offering protection.  The Southern Plains are being forecast to be hit with 50 to 70 mile an hour winds over the next couple of days, with a fear that some of the poorly rated winter wheat will get sandblasted by the winds.  Those fears brought buying to the table.

Tomorrow morning, the USDA will release it’s Weekly Export Sales Report a day early, since USA government offices are not open on Christmas Eve.  Tomorrow’s report is expected to show a seasonal decline in sales, although overall, sales have continued to be quite brisk this fall/winter.  Trade expectations for the report are listed below, in thousands of tonnes:

On the day today, funds were thought to have been buyers across the board, picking up an estimated 10,000 corn contracts (now long 292,000), 5,000 soybean contracts (now long 230,000), and 5,000 Chicago wheat contracts (now long 16,000)