By Kirk Maltais
--Wheat for December delivery rose 2.3% to $7.05 3/4 a bushel on the Chicago Board of Trade Wednesday as traders mulled the possibility that Russia may institute new restrictions on its grain exporting.
--Corn for December delivery rose 1.6% to $5.25 1/2 a bushel.
--Soybeans for November delivery rose 0.7% to $12.82 3/4 a bushel.
Russian Roulette: Wheat futures have reversed from yesterday's fund selloff. Rumors of further Russian limits to their wheat exports boosted prices. "No confirmation is offered, but this would drop 2021/22 Russian wheat exports below 30 million metric tons," said AgResource. "Russian legislation allows for the tax and quotas should Russian wheat stocks/supplies be deemed as too limited." In its most recent WASDE report, the USDA forecast Russian exports at 35 million metric tons.
Waiting on the Sidelines: Grain futures as a whole turned higher Wednesday, but traders said that general movement of futures is limited with harvesting still in its early days in the U.S. "It's hard to believe any buyers will aggressively chase the market higher as harvest is just getting started," said Doug Bergman of RCM Alternatives. According to the USDA's latest crop progress report released Monday, U.S. corn harvest is at 10% complete this week, up from a 4-year average of 9% while the soybean harvest is 6% complete, the same as the 4-year average.
More At Ease: Also pushing grains higher Wednesday was an easing of the general commodity complex's concerns about a potential default of China's Evergrande Group. "We're still relatively sanguine about the risk that Evergrande's collapse triggers a financial crisis or economic crash in China," said Mark Williams of Capital Economics. "The company's equity may be worth next to nothing. But policymakers will use their control of the banking system to prevent financial strains spreading beyond highly-leveraged developers." For grains, traders have debated whether or not fallout from such a failure would impact China's appetite for U.S. agricultural exports.
Streak Snapped: After declining for seven straight weeks, U.S. ethanol inventories were reported higher by the EIA this week. In its report released Wednesday, the EIA said that U.S. ethanol stockpiles totaled 20.11 million barrels, up 101,000 barrels from last week. Analysts surveyed by Dow Jones had forecast stockpiles to fall to as low as 19.51 million barrels. Meanwhile, daily ethanol production fell 11,000 barrels per day, to 926,000 barrels per day. Analysts had forecast production to rise as high as 952,000 barrels per day. While this week's results defied analyst expectations, grains traders are thinking the data will reverse course in the coming weeks. "With ethanol margins improving due to energies rallying and corn prices dropping, we look for a good recovery in production over the next few weeks," said Terry Reilly of Futures International.
Riding For a Fall: Export sales of U.S. soybeans are expected to decline this week, according to grain traders surveyed by The Wall Street Journal. For the week ended September 16, traders estimate soybean sales to total anywhere from 400,000 metric tons to 1.2 million tons - which would be below last week's figure of 1.27 million tons. The decline comes amid a slowdown in the volume of flash sales to China announced by the USDA in the past week.
--The USDA will release its weekly export sales report at 8:30 a.m. ET Thursday.
--The USDA will release its monthly livestock slaughter report at 3 p.m. ET Thursday.
--The USDA will release its quarterly hogs and pigs report at 3 p.m. ET Friday.
--The USDA will release its monthly Cattle on Feed report at 3 p.m. ET Friday.
--The CFTC will release its weekly commitment of traders report at 3:30 p.m. ET Friday.
Write to Kirk Maltais at email@example.com
(END) Dow Jones Newswires