By Kirk Maltais
-- Wheat for March delivery rose 2.5% to $5.86 1/4 a bushel on the Chicago Board of Trade on Wednesday, extending a short-covering rally that began Tuesday.
-- Corn for March delivery rose 0.5% to $4.75 3/4 a bushel.
-- Soybeans for January delivery rose 0.1% to $13.47 1/4 a bushel
Divorced From Fundamentals: Short covering in grains extended into another day, said AgResource in a note, particularly for wheat. Corn also saw support from fund traders seeing an opportunity to exploit the large positions that were reported by the CFTC on Monday.
"The short side of global corn and wheat markets has become overly crowded," the firm said in a note.
Fund traders are net short by over 100,000 contracts in wheat, the CFTC said, and net short in corn by over 185,000 contracts.
Feeding the Need: Better weather for parched northern Brazil and Argentina put weight on CBOT soybeans, keeping futures at or near unchanged in trading for most of the day.
"Forecasts have these showers picking up again this weekend as a front moves into the region, beneficial for soybean development," agricultural research firm DTN said in a note.
Diminished Demand: Export sales of U.S. corn are expected to retreat from strength seen in recent weeks. Analysts surveyed by The Wall Street Journal are forecasting sales to total anywhere from 600,000 metric tons to 1.2 million tons. If the total lands in that range, it would put export sales below where they were last week, when they were at 1.4 million tons.
Flagging demand for U.S. corn exports has been a factor causing fund traders to add short positions, although trading Wednesday was propelled by short covering. If exports fall on the low end of forecasts, that may curb the multiday short-covering wave.
Shrinking Inventory: Total U.S. ethanol inventories fell for the week ended Nov. 24, running counter to the forecasts of analysts surveyed by Dow Jones this week.
The EIA said inventories totaled 21.38 million barrels, down from 21.65 million barrels reported last week. It also runs counter to expectations of a stock uptick. Analysts expected stocks to land between 21.65 million and 22 million barrels.
Average daily production also fell below analyst forecasts, to 1.011 million barrels a day, down from 1.023 million barrels a day the previous week and analyst expectations of 1.013 million barrels a day to 1.036 million barrels.
-- Ethanol producer Rex American Resources is scheduled to release its third-quarter earnings report before the stock market opens on Thursday.
-- The USDA is due to release its weekly export sales report at 8:30 a.m. EST Thursday.
-- The USDA is scheduled to release its monthly agricultural prices report at 3 p.m. EST Thursday.
Write to Kirk Maltais at firstname.lastname@example.org
(END) Dow Jones Newswires