Wheat Climbs on Egypt’s Return to Wheat Market

Traders Await Conab Report on Brazilian Crops

Traders are eagerly anticipating tomorrow’s Conab report, which will provide insights into the status of Brazilian crops. Since late last year, trading has been influenced by Brazilian weather conditions. The report from Conab, Brazil’s national supply company, has consistently shown crop estimates below those of the USDA’s World Agricultural Supply and Demand Estimates (WASDE). With both reports being released this week, traders hope to quickly compare them in order to assess the Brazilian crop’s situation. Naomi Blohm of Total Farm Marketing states, “The reaction to the upside may be strong if steep cuts are made, due to these futures already being oversold,” emphasizing the potential impact of significant reductions in the Brazilian crop.

Technical Pressure

The sluggish performance of CBOT soybean futures compared to corn and wheat today can be attributed to additional short positions added by fund traders. According to Benjamin Hoff of Societe Generale, money managers are consistently pouring short positions into the soy complex, causing the soybean market to remain oversold. The CFTC’s Commitments of Traders report also reflects this sentiment, showing an increase of 15,583 short contracts by managed money, while closing 813 longs. Consequently, soybeans are currently net short by approximately 11,600 contracts.

Minimal Move

Analysts surveyed by The Wall Street Journal predict that the upcoming USDA reports will reveal slight decreases in the production and stockpiles of crops grown in 2023. Both U.S. corn and soybeans are expected to experience these minor reductions, while U.S. wheat is anticipated to show lower winter wheat seedings compared to previous years, along with slightly lower stock levels. The USDA’s January reports hold significance in determining price discovery early in the New Year.

Mixed Message

The weather conditions in wheat-growing regions across the globe present a mixed outlook. Commerzbank highlights contrasting situations, stating that the current cold spell in the Black Sea region poses a threat to the winter wheat crop there, potentially affecting Russia’s wheat supply. However, positive developments have emerged from South America as the Buenos Aires Grain Exchange raised its forecast for the current wheat crop by approximately 3%, estimating it to be 15.1 million tons.

Upcoming Reports:

The EIA will release its weekly ethanol production and stocks report at 10:30 a.m. ET on Wednesday.
The USDA will release its weekly export sales report at 8:30 a.m. ET on Thursday.
The USDA will release its monthly WASDE report at noon ET on Friday.
The USDA will release its quarterly grain stocks report at noon ET on Friday.

CFTC Weekly Commitment of Traders Report

The Commodity Futures Trading Commission (CFTC) is set to release its highly anticipated weekly Commitment of Traders report on Friday at 3:30 p.m. ET. This report provides valuable insights into the positions held by traders in various markets.

What is the Commitment of Traders Report?

The Commitment of Traders report is a widely followed publication that offers a comprehensive breakdown of the positions held by different types of traders in the futures markets. It provides data on market trends and can help identify potential price movements and trading opportunities.

Why is it Important?

Traders, investors, and analysts eagerly await the release of the CFTC’s Commitment of Traders report as it enables them to gauge market sentiment and understand the dynamics of market participants. The report reveals the positions taken by various trader categories, such as commercial hedgers, non-commercial speculators, and small traders, among others.

How to Analyze the Report

By examining the Commitment of Traders report, market participants can gain valuable insights into whether traders are bullish or bearish on a particular asset or market. This information can be used to make informed decisions and adjust trading strategies accordingly.