By Kirk Maltais

-- Corn for December delivery fell 1% to $5.32 1/4 a bushel on the Chicago Board of Trade Wednesday as the U.S. dollar continued to rally while energy prices fell on Russian President Vladimir Putin's comments about stabilizing natural-gas prices.

-- Soybeans for November delivery fell 0.7% to $12.42 a bushel.

-- Wheat for December delivery rose 0.2% to $7.46 a bushel.

HIGHLIGHTS

Double Whammy: After starting higher in trading Wednesday, grain futures turned mostly lower through the day as initial strength gave way to pressure from a stronger U.S. dollar and weakness seen in crude oil and natural-gas futures. The U.S. dollar index trading on the Intercontinental Exchange is up 0.4% Wednesday, making it a 2.4% gain for the index in the past month.

Meanwhile, crude oil and natural gas are lower, particularly natural gas, which closed down 10%.

"Growth in demand should come off the boil as every effort will be made to substitute natural gas for other fuels where possible," said Caroline Bain of Capital Economics.

Weather Watch: Wheat futures trading on the CBOT finished slightly higher Wednesday amid concerns about world weather and watching for news about a tender for foreign wheat by Egypt.

"Dry weather in southern Russia as well as the northern U.S. Great Plains and Canadian Prairies remains a supportive feature in the market although the weather has become old news," said Jack Scoville of Price Futures Group. "The Russian weather has been good for production in northern and western areas but is still trending dry in southern areas and into Kazakhstan."

INSIGHTS

Yield Boost: Row crops in the U.S. are expected to post higher yields than previously forecast by the USDA, according to IHS Markit. The firm estimates 2021 corn yields at 176.8 bushels per acre, up from 175.4 bushels last month. Soybean yields, meanwhile, are expected to rise from 50.0 bushels per acre to 51.1 bushels this month.

The upward revision of yields would fall on the high end of the general trend for revisions in October, said Matt Zeller of StoneX.

"The last 10 October reports have seen corn yields change by only three-quarters of a bushel on average, with beans at a 0.4 bpa average absolute change since 2013," Mr. Zeller said.

Production Surge: U.S. ethanol production jumped for the week ended Oct. 1, rising to a level last seen in August. In its latest weekly report, the EIA said that U.S. daily ethanol production hit a rate of 978,000 barrels per day, up from 914,000 barrels per day reported last week.

The uptick is well beyond the estimates of analysts surveyed this week by Dow Jones, who had forecast production to be anywhere from 902,000 barrels per day to 930,000 barrels per day.

Meanwhile, U.S. ethanol inventories also dropped more than expected by analysts, falling to 19.93 million barrels, down 289,000 barrels from the previous week. Analysts were looking for stocks to be anywhere from 20.02 million barrels to 20.32 million barrels.

Looking for an Increase: Grain traders surveyed by The Wall Street Journal are forecasting export sales of U.S. corn to rise for the week ended Sept. 30, with sales totaling anywhere from 350,000 metric tons to 800,000 tons. By comparison, corn sales last week totaled 370,400 tons.

Traders are expecting wheat to show higher figures as well with sales totaling anywhere from 200,000 tons to 500,000 tons versus 290,100 tons last week.

AHEAD

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

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

-- The USDA is scheduled to be closed in observance of Columbus Day on Monday. It will reopen Tuesday.

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

(END) Dow Jones Newswires

10-06-21 1600ET