By Kirk Maltais


-Wheat for March delivery rose 2.5% to $6.12 a bushel on the Chicago Board of Trade on Wednesday as more traders covered their ample short positions on grains.

-Corn for March delivery rose 1.2% to $4.52 1/4 a bushel.

-Soybeans for March delivery were unchanged at $12.39 a bushel.


HIGHLIGHTS


Rally Cry: The large short positions in CBOT grains confirmed by the CFTC on Friday are starting to give way to short-covering by traders. "Prices in Chicago are seeking to recover from their sharp fall at the beginning of last week," said AgriTel in a note. "The slight rebound observed is mainly technical, although last Friday's good U.S. export figures are also a source of support." The CFTC reported that managed money funds are holding a net-short position of roughly 260,000 contracts in corn through Jan. 16, while combined wheat contracts are net-short by nearly 137,000 contracts and soybeans are net-short nearly 77,000 contracts.

Shot Down: News of a Russian military plane crash close to Ukraine also supported wheat. Russia accused Ukraine of shooting the Ilyushin Il-76 from the sky over the Belgorod region. Traders are mulling over the implications of what the attack will mean for wheat exports, but added risk premium in afternoon trading.


INSIGHT


Shifting Focus: South American weather has been the main mover for CBOT grains in recent weeks, but the focus of this attention has shifted from Brazil to Argentina. "The Argentine weather forecast offers limited rainfall and rising temperatures for the next two weeks," AgResource said in a note. "Notable heat with highs in the upper 90's to lower 100's will be felt across Argentina early next week which will spark acute crop stress." The lack of rainfall is expected to deplete soil moisture there, according to DTN in a note.

Three-Year Low: The average daily production for U.S. ethanol fell to its lowest level since February 2021, according to EIA data. In its latest weekly report, the agency said that for the week ended Jan. 19, daily ethanol production landed at 818,000 barrels a day. That is the lowest average production since it landed at 658,000 barrels a day for the week ended Feb. 19, 2021. The figure is well below the estimates of analysts surveyed by Dow Jones this week, with analysts forecasting daily production to be anywhere from 1.034 million barrels a day to 1.074 million barrels a day.

Demand Potential: Export sales of U.S. soybeans are expected to surge versus the previous week, according to analysts surveyed by The Wall Street Journal. For the week ended Jan. 18, soybean sales reported by the USDA are predicted to climb to as high as 1.23 million metric tons, which is up from 783,000 tons last week. Corn sales are also forecast to exceed 1 million tons, with wheat seen as climbing as high as 700,000 tons. The outlook for export demand going forward has been a chief factor pressuring grain futures, with demand seen as weak.


AHEAD


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

-The USDA will release its monthly Livestock Slaughter report at 3 p.m. ET Thursday.

-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

01-24-24 1505ET