By Kirk Maltais


-- Wheat for March delivery fell 4.3% to $7.87 1/4 a bushel on the Chicago Board of Trade Tuesday, with commodity traders across the board pulling back from previous investments amid lingering Omicron and inflation concerns.

-- Corn for March delivery fell 2.5% to $5.67 1/2 a bushel.

-- Soybeans for January delivery fell 2% to $12.17 1/4 a bushel.




Double Whammy: Weakness in crude-oil futures and commodities as a whole extended into grain futures Tuesday because of Covid-19 variant and inflation concerns.

"WTI crude oil and other commodity markets are selling off this morning from ongoing concerns over the Omicron after a major drug company told a newspaper that the existing vaccines are likely less effective against the latest variant," said Terry Reilly of Futures International.

Crude-oil prices have been particularly affected by news of Omicron with WTI light crude closing down 5.4% to $66.18 per barrel.


Mass Exodus: Managed money funds were the main driver for the risk-off approach in grains, with liquidation of long positions extending from Monday's session into Tuesday.

"Managed funds liquidated to start the week with corn sales estimated at 10k to drop the net long to 356k, net sellers of 5k beans to drop the net long to 36k, and net sellers of 8k wheat to drop the position to short 3k," said Doug Bergman of RCM Alternatives.

Outlooks for more robust production of row crops globally are also weighing on futures, he added.




Missed Deadline: The apparent delay of the EPA in proposing its new biofuel mandates may be a factor pressuring corn futures in the coming days. Traders were expecting the EPA to report its new guidance Tuesday for biofuel blending rules through 2022.

"EPA did propose an extension in this deadline, but little else is known about volumes or the timing of publication," said AgResource.


Adversity Ahead: Although grain traders are liquidating long positions Tuesday, adverse weather stemming from La Niña may be a factor lifting grain prices longer term, said Rabobank in its latest Agri Commodity Markets Outlook report. According to the firm, La Niña looks to exacerbate drought conditions in the U.S., Brazil and Argentina in the upcoming growing season, which along with other factors such as higher input costs and a snarled supply chain look to support higher prices.

"There will be no return to pre-pandemic prices in 2022," said Carlos Mera of Rabobank. "While Covid-19-related disruption will subside, inflationary pressures and adverse weather will hit producers, making them unable to significantly expand output."


Applying the Brakes: Analysts surveyed by Dow Jones this week are forecasting a potential drop in daily production of ethanol in the U.S. They see daily production landing anywhere from 1.04 million barrels to 1.09 million barrels per day versus 1.08 million barrels per day reported last week.

Meanwhile, U.S. ethanol stockpiles are expected to have further upside, landing anywhere from 20.1 million barrels to 20.36 million barrels from 20.16 million barrels last week.




-- The EIA is scheduled to release its weekly ethanol production and stocks report at 10:30 a.m. EST Wednesday.

-- The USDA is due to release its monthly grain crushings report at 3 p.m. EST Wednesday.

-- The USDA is scheduled to release its weekly export sales report at 8:30 a.m. EST Thursday.


Write to Kirk Maltais at


(END) Dow Jones Newswires

November 30, 2021 15:45 ET (20:45 GMT)

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