By Kirk Maltais 



  -- Wheat for July delivery rose 3% to $5.13 3/4 a bushel on the Chicago Board of Trade Wednesday, up the second consecutive day as managed money funds covered short positions on reports of lower Russian grain supplies. 


  -- Soybeans for July delivery rose 0.5% to $8.46 3/4 a bushel. 


  -- Corn for July delivery fell 0.5% to $3.19 1/2 a bushel. 


  HIGHLIGHTS 


  Running Dry: July wheat futures outpaced their corn and soybean counterparts on the CBOT Wednesday. According to grains traders, the short covering by managed money funds was in reaction to reports Russian and Eastern European wheat crops are being stressed by drought-like conditions. 


  "It continues to be dry in parts of Europe and Russia," said Don Roose of U.S. Commodities. 


  Russia's grain production forecast was reduced overnight to 120 million metric tons this year, down from a previous projection of 125.3 million tons. 


  Ethanol Improving: U.S. ethanol production continues to improve after hitting a record low last month, rising 46,000 barrels per day to 663,000 barrels per day this week, according to the EIA. 


  Meanwhile, ethanol inventories continue to decline, with inventories down 564,000 barrels to 23.626 million barrels. 


  While this movement was expected by grains traders, it isn't as large as some predicted, and it is unclear if ethanol usage can bounce back fast enough to materially affect prices. 


  "This year's pattern is anything but seasonal due to the intentional shutdown of the economy that slashed gasoline consumption in half at one point," said Arlan Suderman of INTL FCStone. 


  INSIGHT 


  Unanswered Questions: The USDA's announcement of how $16 billion in aid payments to agricultural producers in the U.S. will be apportioned left traders and farmers alike with a lot of questions. 


  "The USDA tried to make it as complicated as possible to understand that program," quipped Dave Marshall of First Choice Commodities. 


  Traders say the agricultural markets as a whole are unclear on how producers will receive aid payments. 


  In its announcement Tuesday, the USDA said producers of nonspecialty crops such as corn and soybeans will be paid based on inventory subject to price risk held as of Jan. 15, which is 50% of a producer's total production in 2019 or their inventory of old crop -- whichever is smaller -- multiplied by the commodity's applicable payment rates. 


  Bean Bounce-Back: Higher exports of soybeans and soy products are expected to be reported by the USDA when the agency releases its weekly export sales figures Thursday morning. According to traders surveyed by The Wall Street Journal, soybean exports may be as high as 1.5 million metric tons, while soymeal exports could be as high as 250,000 tons and soy oil exports as high as 45,000 tons. All of these figures would well exceed totals from last week, and would likely be due to increased Chinese purchasing of U.S. soy exports. 


  AHEAD: 


  -- The USDA is scheduled to release its latest weekly export sales numbers at 8:30 a.m. EDT Thursday. 


  -- The USDA is due to release its monthly cold storage report at 3 p.m. EDT Thursday. 


  -- The USDA is scheduled to release its monthly Cattle on Feed Report at 3 p.m. EDT Friday. 


  -- The CFTC is due to release its weekly commitments of traders report at 3:30 p.m. EDT Friday. 


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