By Kirk Maltais


-Soybeans for March delivery fell 1% to $12.35 1/2 a bushel, on the Chicago Board of Trade on Wednesday, dropping in response to Conab cutting its outlook for Brazilian soybean production less than hoped for by traders.

-Corn for March delivery fell 0.1% to $4.59 a bushel.

-Wheat for March delivery were unchanged at $6.10 a bushel.


HIGHLIGHTS


Grabbing for the Record: Despite Brazilian crop agency Conab making cuts to its outlook for 2023/24 soybeans, the agency's projections remain record-high. Conab is now forecasting a Brazilian soybean harvest of 155.3 million tons - which while down from 162 million tons to start the year is still more than the 154.6 million ton record set last year. Traders had hoped to see deeper cuts to Brazilian production, sending soybeans lower after it became clear that the country was set for record output.

Verge of Volatility: CBOT grains were caught in a choppy session today, with corn and wheat staying close to neutral while soybeans slid. Much of the volatility comes from automated trading chasing trends ahead of Friday's WASDE report, said AgResource in a note. "Algos/AI pushes trends until the market pushes back," said the firm. For soybeans, automated trading added pressure to futures following the release of Conab's report.


INSIGHT


Overly Sold: Negative momentum has persisted for CBOT grains, even as analysts say grains across the board have room to turn higher. "Corn is oversold," said AgriSompo in a note. "We are in front of a big report on Friday, and that could lead to some buying over the next couple of sessions." However, that buying did not appear today - even if last Friday's Commitments of Traders report from the CFTC confirmed large net shorts for grains, particularly corn.

Sour Taste: U.S. grain export sales are expected to turn higher than last week's poor showing, but analysts are forecasting that sales will continue to be weak, and as a result middling export demand will continue to keep a lid on futures. "Price gains are limited due to current soft demand, tied to an anemic domestic and global economy, with particular focus on China," said Arlan Suderman of StoneX in a note. However, analysts surveyed by The Wall Street Journal are holding out for the possibility of a surge in sales, with corn sales estimated as rising as high as 1.2 million metric tons this week.

Early Surge: Inventories of ethanol in the U.S. surged into the New Year, rising to levels previously seen last spring. According to the latest data from the EIA, U.S. ethanol inventories totaled 24.37 million barrels through the week ended Jan. 5. That's up 792,000 barrels from the previous week, and is the highest inventories have been since mid-April 2023. Analysts surveyed by Dow Jones this week were expecting a smaller uptick in inventories. Average daily production meanwhile rose to 1.062 million barrels a day from 1.049 million barrels a day the previous week.


AHEAD


--The USDA will release its weekly export sales report at 8:30 a.m. ET Thursday.

--The USDA will release its monthly WASDE report at noon ET Friday.

--The USDA will release its quarterly grain stocks report at noon ET Friday.

--The CFTC will release its weekly Commitment of Traders report at 3:30 p.m. ET Friday.


Write to Kirk Maltais at kirk.maltais@wsj.com


(END) Dow Jones Newswires

01-10-24 1514ET