By Kirk Maltais


-- Wheat for December delivery rose 1.7% to $5.80 1/4 a bushel on the Chicago Board of Trade on Wednesday, with China's better-than-expected gross domestic product reading giving hope for U.S. export demand, while fighting between Israel and Gaza kept grains on edge.

-- Soybeans for November delivery rose 1.1% to $13.11 a bushel.

-- Corn for December delivery rose 0.6% to $4.92 a bushel.


HIGHLIGHTS


Multi-Pronged: CBOT wheat futures caught support from a tightening supply picture, as wheat-growing countries such as Argentina and Australia struggle with the effects of dry weather.

Additionally, the USDA's announcement of China purchasing soft red winter wheat exports from the U.S. last week continues to have traders re-evaluating their view on wheat.

"Maybe the trade is catching on to the fact that the world wheat stock-to-use ratio is trending lower while the global corn and soybean stock-to-use ratios are moving higher," said Joel Karlin of Ocean State Research.


Better than Expected: Positive economic results reported in China, with the third-quarter GDP growth at 4.9% versus expectations of a 4.4% increase, lifted grains across the board. Stronger-than-expected GDP growth is boosting the sentiment that an expanding economy will lead to improved demand for exports, including U.S. goods such as beef, pork, corn and soybeans and soy products.


Risk Management: War premium stemming from the evolving Israel-Gaza conflict was added to CBOT grains as well as other commodities.

"Markets are trading with solid gains this morning, seeing general strength led by the crude oil on continued tensions in the Middle East," said Doug Bergman of RCM Alternatives in a note.


INSIGHT


Even Flow: The flow of vessels designed to transport grains that have been produced in Ukraine has remained steady with another five vessels arriving to the country in recent days.

"Ukraine reports that 34 ships have arrived at the ports of Odesa through the corridor since Sept. 6, with 20 of them carrying agricultural products from Ukraine during the period," said Arlan Suderman of StoneX in a note, adding that for some ships it is the first time they have traveled to Ukraine since the war broke out.


Fresh Fodder: The USDA confirmed a new flash sale of soybean exports to China, with 132,000 metric tons sold for delivery in 2023-24. Wheat sales to China were a major source of momentum for grain futures last week, and some analysts think that the new soybean sales may provide a similar benefit.

"Chinese demand seems to be picking up a little, the question is whether it will be enough to push soybean prices up through resistance," said Tomm Pfitzenmaier of Summit Commodity Brokerage in a note.


Plunging the Depths: Total ethanol inventories in the U.S. fell to their lowest level since December 2021, according to data from the EIA issued Wednesday.

In its latest weekly report, the EIA said that inventories of ethanol totaled 21.11 million barrels for the week ended Oct. 13, down 414,000 barrels from the previous week. The total falls on the low end of estimates from analysts surveyed by Dow Jones this week, who forecast inventories between 21 million barrels and 21.63 million barrels.

Daily average production climbed for the week, at 1.035 million barrels a day, up 31,000 barrels a day from the previous week.


AHEAD


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

-- The USDA is due to release its monthly livestock slaughter 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 scheduled to release its weekly Commitments of Traders Report at 3:30 p.m. EDT Friday.


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


(END) Dow Jones Newswires

10-18-23 1558ET