(AgWeb) – In the overnight session the grains traded higher with corn up 2 1/2 cents, soybeans up 12 cents, Chicago wheat up 6 1/2 cents and Kansas City wheat up 7 cents. Grains are moving higher on crop stress concerns in Argentina and dryness in the US Plains.
The latest forecast for Argentina weather has many traders worried that the minimal subsoil moisture in the central and southern parts of Argentina combined with the hot dry weather will damage yield potential. A high pressure ridge will move into Argentina this week and temperatures are expected to rise into the 90’s and low 100’s. Crops will see stress over the next 8 to 10 days and it is likely that production potential will be damaged.
Brazil weather is expected to be wetter and possibly slow soybean harvest and corn planting. Rains are expected to continue in the southern part of the country throughout the week.
The average corn basis across the US slipped by a penny last week while soybeans fell by 1/2 a cent. The rally in the futures market has brought more willing sellers to the table which has helped originators book more grain without becoming more competitive with basis. In fact, many western corn belt soybean plants dropped their basis by 5-10 cents. Basis along the river terminals also saw pressure as barge rates increased with soybean basis down 4 cents and corn basis unchanged.
The commitment of traders report for the week ending January 23rd showed that wheat speculators increased their net short position by 2,480 contracts to 166,064. Both corn and soybeans had a decrease in the net short position during the same period. The net short position in corn shrunk by 10,043 contracts to 248,041 and soybeans net position shrunk by 19,629 to 117,023.
