By Kirk Maltais


-Corn for May delivery rose 2.1% to $4.38 a bushel, on the Chicago Board of Trade on Thursday, with traders hedging their bets against the sizable short positions built by fund traders this year in front of tomorrow's WASDE report from the USDA.

-Soybeans for May delivery rose 1.6% to $11.66 1/4 a bushel.

-Wheat for May delivery fell 0.4% to $5.29 1/4 a bushel.


HIGHLIGHTS


Just in Case: Enthusiasm for corn futures has been muted this year, but traders today decided to cut some of their short positions ahead of tomorrow's WASDE. "The funds are doing exactly what they should be doing here; taking off some shorts after a big down move," said Charlie Sernatinger of Marex in a note. However, Sernatinger adds, it'll likely take a sustained reversal before 'major core position short covering' takes place.

Mixed Reaction: CBOT wheat closed the day lower, but only after spending much of the day trading higher. For much of the day, traders appeared unfazed by news that China will no longer follow through on a purchase of 130,000 metric tons of soft red winter wheat for delivery in the 2023/24 marketing year - confirming a rumor that circulated in the market yesterday. However, this along with expectations for a weak WASDE report ultimately reversed the course of wheat trading.


INSIGHT


Locked in Suspense: Tomorrow's WASDE report may bring surprises in projections for Brazilian crops - which carry implications for the outlook on U.S. export demand. Analysts think the USDA will likely make cuts to Brazilian corn and soybean production. "The agency's current estimate is a good deal bigger than other local forecasters," said analysts with Hedgepoint Global in a note. Analysts surveyed by The Wall Street Journal forecast a cut of 3.5 million metric tons to Brazilian soybean production, which if true, would still keep the USDA's outlook for Brazil higher than Conab and other regional forecasters.

Sluggish Moves: It'll take a major surprise out of the WASDE to ignite the surge in short-covering that's been anticipated by traders all year. "A technical correction to the upside may be warranted soon, but fresh friendly news is needed to entice funds to exit short positions," said Naomi Blohm of Total Farm Marketing in a note. Nothing out of the news cycle so far this year has been enough to spark a lasting reversal.

Exceeding Expectations: Soybean export sales through the week ended Feb. 29 beat the forecasts of analysts surveyed by The Wall Street Journal this week. In its weekly export sales report, the USDA said that soybean exports totaled 679,500 metric tons across the 2023/24 and 2024/25 marketing years. That's way up from last week's total sales of 159,700 tons, and beat analyst forecasts - which put soybean sales between 180,000 tons and 600,000 tons. Corn and wheat sales fell within analyst estimates for the week - with corn totaling 1.11 million tons and wheat totaling 335,100 tons.


AHEAD


-The USDA will release its monthly World Supply and Demand Estimates report at noon ET Friday.

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

-The USDA will release its weekly grains export inspections report at 11 a.m. ET Monday.


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


(END) Dow Jones Newswires

03-07-24 1509ET