By Kirk Maltais
-- Wheat for March delivery rose 1% to $6.00 3/4 a bushel on the Chicago Board of Trade on Wednesday, showing short covering ahead of reports from the USDA and Statistics Canada that are expected to impact the global picture for wheat.
-- Soybeans for March delivery fell 0.8% to $11.89 3/4 a bushel.
-- Corn for March delivery fell 0.9% to $4.34 3/4 a bushel.
HIGHLIGHTS
Utter Speculation: Traders and analysts have been making their guesses throughout the week as to what the slate of reports due Thursday will mean for the big picture of row crops. And for wheat, traders opted to cover some shorts in preparation for any surprises in terms of global production or the export market.
Alterations in Australian or Ukrainian production, along with U.S. exports, could be major changes in the reports, said Alef Dias of Hedgepoint Global in a note.
Saturated Ground: Forecasts for a wetter weather soon to come in Argentina had grain traders taking no chances with corn and soybeans with "the potential for a bumper crop there offsetting any concerns about the Brazilian crops coming up short for the time being," said Doug Bergman of RCM Alternatives.
The balance of factors in Brazil and Argentina leave corn and soybeans with ample supply outlooks, which is being reflected in the short positions that traders continue to add.
Nearing New Year: CBOT soybeans were the leading loser in grains for most of the day. Rainfall in Argentina put stress on futures, and so did China's Lunar New Year holiday when the biggest importer of U.S. grains takes time off from commerce.
"The extra negative influence on beans is that demand is awful," said Brian Pullam of Linn & Associates. "China celebrating their Lunar New Year Holiday starting this weekend and all of next week will not help that."
Export sales of U.S. soybeans totaled only 165,800 metric tons through Jan. 25, reinforcing claims of weak export demand.
INSIGHT
Cold Snap: Temperatures are currently mild in U.S. crop-growing areas, putting little stress on winter wheat and keeping pressure off of other row crop futures.
However, scattered forecasts of a new polar vortex hitting the continental U.S. near the end of the month may signal a new surge in CBOT futures, said Daniel Flynn of Price Futures Group in a note.
"One thing you can bet on for sure, rallies in food and energy prices ahead of the planting season," he said.
A polar vortex that traveled through the U.S. last month introduced delays to supply chains and affected prices.
From the Bottom: After briefly tumbling to lows last seen during the Covid-19 pandemic, daily ethanol production is now back over 1 million barrels a day, the EIA said Wednesday. In its weekly report, the EIA said that average daily ethanol production for the week through Feb. 2 was 1.033 million barrels a day. That's up 26% from the multiyear lows reported two weeks ago at an average of 818,000 barrels a day, production was at its lowest since February 2021.
Driving the lower reading was a winter storm that introduced bone-chilling temperatures and disrupted supply chains in the Midwest. The uptick was expected by analysts surveyed by Dow Jones this week, but it exceeded forecasts.
However, a rebound in corn futures hoped for by some analysts didn't take place.
AHEAD
-- The USDA is scheduled to release its weekly export sales report at 8:30 a.m. EST Thursday.
-- The USDA is due to release its monthly world supply and demand estimates report at noon EST Thursday.
-- The CFTC is scheduled to release its weekly Commitments of Traders Report at 3:30 p.m. EST Friday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
02-07-24 1543ET
