Grains are lower in overnight trading:

Mar Corn – 5 cents/bu (5.99 ¾ )

Jan Soybeans – 9 cents/bu (13.50 ¼  )

Mar Chi Wheat – 4 cents/bu (7.79 ½ )

Cdn $ +0.00020 (78.04 cents)

WTI Crude Oil -0.42/barrel (75.56)

Grains traded both sides of unchanged overnight, as futures initially bounced back from Tuesday’s steep losses.  But selling has re-emerged, with pre month end profit taking by speculators dominating the trade.  End of year position squaring will likely continue, with funds still holding significant long positions in corn and soybeans.  An overnight sell off in outside commodities did not help grains either.

While grains have backed off significantly from Tuesday’s early morning highs, in reality, soybean prices are right where we began the week.  Wheat values have dropped significantly however, and are technically weak.  Corn has broken through technical support as well, but fundamentally, the high cost of inputs, dryness in South America, and overall inflation concerns should keep corn supported at the $6.00/bu level on the March contract.

Fundamentally, not a lot has changed with respect to South American growing conditions.  It is still hot and dry in Argentina, Paraguay, and southern Brazil.  Extended forecasts continue to show the possibility of rains for southern Brazil in the next two weeks, while Argentina looks to remain dry.