By Kirk Maltais

--Corn for July delivery rose 2.2% to $3.27 1/2 a bushel on the Chicago Board of Trade Thursday as some institutional traders opted to cover their sizable short positions in corn as EIA data shows improvement in ethanol production.

--Wheat for July delivery rose 2% to $5.14 1/2 a bushel.

--Soybeans for July delivery fell 0.2% to $8.47 a bushel.

HIGHLIGHTS

Who Wears Short Shorts: Grains traders, particularly managed money funds, opted to close their big short positions Thursday. This drove CBOT corn and wheat futures higher today. "It has been a big morning of volume at the CBOT with grain futures rising to sharp gains on technical buying and spread unwinding," said AgResource.

Signs of Life: The gradual reopening of the U.S. economy is breathing some life back to the ethanol industry, with daily production up to 724,000 barrels per day, according to the EIA -- the highest since late March. Meanwhile, inventories are down to 23.176 million barrels, now roughly 4.5 million off of highs seen in mid-April. The continued drawdown of stocks and rise of production struck a hopeful note with grains traders this afternoon, sending corn futures higher Thursday.

Sanction Fallout: Soybean futures on the CBOT defied trends in other grains Thursday, with traders unsure about how China's recent moves to override Hong Kong's autonomy will affect its relationship with the U.S. and the Phase One trade agreement. Legislation passed by the U.S. Congress this week designed to sanction China for treatment of minorities, the Uyghur Human Rights Policy Act of 2020, may further kindle tensions between the two nations.

INSIGHT

Grain Glut: Poultry producer Sanderson Farms expects feed grain prices in 2020 to remain lower than they were in 2019 for the rest of the year. "There are ample supplies of both corn and soybeans worldwide, and the pandemic has had a material impact on demand for feed grain, especially corn used for ethanol," the company said in its earnings release Thursday. Sanderson cites USDA crop progress reports as evidence of this - with corn planting progress at 88%, up from 55% at the same time last year.

Sales Shortfall: Grain export sales are expected to drop this week according to traders surveyed by The Wall Street Journal. The ranges of sales for corn and soybeans, particularly, are down from last week's predictions - with traders expecting anywhere from 600,000 metric tons to 1.2 million tons of new US corn export sales and 400,000 tons to 1.4 million tons of soybean export sales. While wide ranges -- traders agree that soybean exports will be less than the 1.669 million tons reported last week. However, this is partially because of the Memorial Day holiday and partially because the rate of Chinese purchasing of U.S. agricultural goods appears to have slowed down.

Harvests of Plenty: Record harvests of wheat and corn will drive grain production to an all-time high in 2020-21 and push global stockpiles up for the first time in four seasons, the International Grains Council said Thursday. It now expects total grains production of 2.230 billion metric tons, an all-time high. That rise, along with a cut in the IGC's forecast for 2020-21 grain consumption, means the group raised its forecast for grain stockpiles by 10 million tons, to 627 million tons. That would mark the first rise in stocks for four seasons.

AHEAD:

--The USDA will release its monthly agricultural prices report at 3 p.m. ET Friday.

--The CFTC releases its weekly commitment of traders report at 3:30 p.m. ET Friday.

--The USDA releases its weekly grain export inspections data at 11 a.m. ET Monday.

--The USDA releases its weekly crop progress report for the 2020/21 crop at 4 p.m. ET Monday.

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