By Kirk Maltais
-- Wheat for March delivery rose 2.8% to $5.52 a bushel on the Chicago Board of Trade Thursday, with traders busy short covering even as supply-demand fundamentals don't appear much tighter.
-- Soybeans for March delivery rose 1.1% to $11.36 1/2 a bushel.
-- Corn for March delivery rose 0.9% to $4.31 1/4 a bushel.
HIGHLIGHTS
Surge of Interest: CBOT wheat led the grains complex up for the second straight day, with the short covering that began Wednesday still at play. According to FactSet data, open interest in wheat yesterday was a year high, the highest it has been since early November. Open interest surged past that level Thursday.
"Funds have been slowly paring down their net short position over the last week but got much more aggressive ... possibly due to the fact shorts are getting weary of ongoing sideways action," said the Hightower Report in a note.
Talks of a Truce: A report in the South China Morning Post that President Trump and President Xi could extend their trade truce for another year supported soybean futures, but for how long this will continue is the question.
"The global supply is still viewed as more than adequate to meet demand and U.S. acres will grow significantly if the current bean/corn price relationship holds," said Doug Bergman of RCM Alternatives in a note. "The market can likely hold together until it shows a sign of technical weakness, but longer term and from a fundamental standpoint, there's not a lot of justification for higher prices."
Slow Roll: The dollar turned weaker despite signs of U.S. labor market resilience, which will likely keep the Fed on hold for an extended period of time.
"That points to entrenched bearishness, and serves as a warning to those -- ourselves included -- who have been expecting stronger U.S. fundamentals to play a supportive role," Corpay's Karl Schamotta said. "By historical standards, the greenback's decline so far remains modest, leaving scope for further downside if the mood doesn't shift."
A weaker dollar tends to be positive for grain futures, as it makes those exports more attractive for buyers.
INSIGHT
Busted Balance Sheet: Returns on spring acres may stay unprofitable, said Purdue University's Center for Commercial Agriculture. In an analysis of potential crop budgets for farmers in Indiana, Purdue said that even farmers with "high productivity soil" need better underlying crop prices to turn a profit, and at this juncture are likely to lose money. For average productivity soil, farmers stand to lose over $200 an acre on a continuous corn crop -- crops grown in fields that also grew corn last year.
Most farmers use rotations for their fields to maximize their crop yields, but losses for corn and soybeans in rotation are expected, an average loss of $86 an acre for soybeans and $147 for corn. Wheat acres look to lose $183 an acre.
Seasonal Change: The NOAA's Climate Prediction Center said that a transition from a La Niña climate system to an ENSO-neutral one is expected between the months of February and April 2026. NOAA gives a 60% chance for the climate to shift in those months, with a 56% chance of that shift taking place in the months between June and August.
La Niña tends to bring drier conditions to the U.S. Corn Belt, which gives farmers more opportunity to get into the fields to plant.
Missing the Mark: Soybean exports for the week fell below analyst estimates, the USDA said Thursday. Soybean export sales for the week ended Feb. 5 were 283,100 metric tons across the 2025-26 and 2026-27 marketing years. That is below the low end of forecasts from analysts surveyed by The Wall Street Journal this week, who had forecast sales as much as 1.1 million tons.
Corn sales totaled 2.13 million tons across both marketing years, and wheat sales were 501,900 tons, beating the high end of analyst forecasts for the week.
AHEAD
-- The CFTC is scheduled to release its weekly Commitments of Traders Report at 3:30 p.m. EST Friday.
-- The CBOT and the USDA will both be closed Monday in observance of Presidents Day, reopening on Tuesday.
-- The USDA is due to release its weekly grain export inspections report at 11 a.m. EST Tuesday.
-- Paulo Trevisani contributed to this article.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
02-12-26 1525ET
