By Kirk Maltais

--Corn for December delivery rose 3.3% to $5.58 3/4 a bushel on the Chicago Board of Trade Wednesday as grains traders saw dryness coming to growing areas disrupting already-strained crop growth.

--Wheat for September delivery rose 3.2% to $6.54 1/4 a bushel.

--Soybeans for November delivery rose 2.3% at $13.83 1/4 a bushel.

HIGHLIGHTS

Risk Reaction: Grains futures extended their rally Wednesday, fueled mostly by expectations of dryness affecting growing row crops. "The grain and oilseed markets added weather premium back to the market today as traders looked beyond rains currently falling in Iowa to the outlook for the rest of the next 10 days," said Arlan Suderman of StoneX. "That outlook has a hot dry bias to it for areas of the Northern Plains and northwestern Midwest Corn/Soybean Belt." Forecasts are mixed outside of the next week, said Mr. Suderman.

Back to Buying: Wheat futures were also supported today by Egypt's new tender for wheat. Romanian wheat was the cheapest on offer at an Egyptian international wheat tender Wednesday, according to a lineup of offers seen by The Wall Street Journal. The cheapest bid out of a total of 18 bids was $231.88 a metric ton for a 60,000-ton cargo of Romanian wheat. Egypt purchased wheat last week, making their return to the export market vitalizing for wheat prices. "Nearby world wheat import demand continues to rise," said AgResource. "Seasonal lows have been forged or are in the making in world wheat markets."

INSIGHTS

Record Setting: South Dakota had its driest June on record, according to data from the National Centers of Environmental Information released this week. The drought conditions that has introduced volatility into grains futures over the past month has clearly been felt in the Northern Plains, with Minnesota having its 7(th) driest June on record, Nebraska having its 13(th) driest June, and North Dakota having its 15(th) driest June. However, other states such as Illinois and Iowa had a wet month, and southern delta states experienced record wetness - with Mississippi having its second-wettest June on record.

On a Skid: Production and inventories of U.S. ethanol slid this week, with production falling farther than expected by analysts. For the week ended July 9, ethanol production fell 26,000 barrels per day, to 1.041 million barrels per day, according to the U.S. Energy Information Administration. Analysts surveyed by Dow Jones this week had forecast production to fall by as much as 18,000 barrels this week, off of last week's total of 1.067 million barrels. Meanwhile, ethanol inventories totaled 21.13 million barrels for the week. That's down 15,000 barrels from last week, a decline within analyst expectations.

Turned Up: Grain traders surveyed by The Wall Street Journal say that they are forecasting export sales to bounce this week. Traders surveyed say that the USDA to report this week that corn sales will total anywhere from 200,000 metric tons to 650,000 tons for the week ended July 8, and soybean sales totaling from 200,000 tons to 750,000 tons. Both of these ranges would be higher from last week's figures from the USDA.

AHEAD:

--The USDA will release its weekly export sales report at 8:30 a.m. ET Thursday.

--Railroad provider Kansas City Southern will release its second quarter earnings before the stock market opens on Friday.

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

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

(END) Dow Jones Newswires

07-14-21 1453ET