By Kirk Maltais


--Wheat for May delivery fell 7.4% to $10.69 1/4 a bushel on the Chicago Board of Trade Wednesday, dropping by its extended limit of 85 cents per bushel as rainfall is expected to hit dry areas in the next week.

--Corn for May delivery fell 3.7% to $7.30 a bushel.

--Soybeans for May delivery fell 0.6% to $16.49 1/4 a bushel.


HIGHLIGHTS


Thirst Quencher: Rainfall forecast arriving to dry winter-wheat growing areas in the U.S. Midwest was a main source of pressure on CBOT wheat futures Wednesday. DTN forecasts scattered showers arriving in the Midwest beginning tomorrow. "The morning weather update has much-needed rain coming into a large portion of the red winter wheat region late week and then moving into the Midwest for the weekend," said Dan Hueber of the Hueber Report. "Needless to say, more and ongoing rain will be needed in the southwest."

Hedging Bets: Outside factors pressuring CBOT futures as a whole, like a raise in interest rates by the Federal Reserve as well as potential talks between Russia and Ukraine, injected volatility into grain futures. Managed money funds have been the active sellers in today's pullback - with AgResource reporting that funds have sold 15,000 corn contracts, 7,600 wheat contracts, and 3,400 soybean contracts. "Volatility is something that [we've] been warning clients about since February, and there is no sign of it ending anytime soon," said AgResource.


INSIGHTS


Looking Inward: After trading on the development of the South American crop in January and February, traders of CBOT soybean futures are turning their attention towards what the U.S. crop may look like this crop year. "The crop losses in South America have pretty much been factored into the price and the trade is now expected to turn its focus to the crop prospects for the U.S. this summer making the acreage intentions a bigger deal this year than it is normally," said Tomm Pfitzenmaier of Summit Commodity Brokerage. The USDA will release its annual Prospective Planting report on March 31, which will inform how tight U.S. supply may be this year amid skyrocketed fertilizer prices.

Back on High: Ethanol inventories in the U.S. have risen to their highest level since late April 2020 - the early days of the Covid-19 pandemic. In its latest weekly report, the EIA said that for the week ended March 11 ethanol inventories totaled 25.95 million barrels, up from 25.27 million barrels reported last week. It's the highest inventories have been since April 2020, when the EIA reported inventories of over 26 million barrels. The stockpiles are well above the forecasts of analysts surveyed by Dow Jones this week. Analysts had forecast stocks to be anywhere from 25.25 million barrels to 25.5 million barrels.

Backing Off: Export sales of U.S. corn and soybeans are expected to drop off from last week's strong figures, according to traders surveyed by The Wall Street Journal this week. Traders are forecasting corn sales to total anywhere from 700,000 metric tons to 1.65 million tons across the 2021/22 and 2022/23 marketing years for the week ended March 10, while soybeans are forecasted between 1.1 million tons and 2.5 million tons. Both of these ranges come in below the totals reported by the USDA last week. Traders this week have said that they expect U.S. export sales to grow in the coming weeks, with Ukrainian and Russian exports missing from the market.


AHEAD


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

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

-The USDA will release its weekly grains export inspections report at 11 a.m. ET Monday.


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


(END) Dow Jones Newswires

03-16-22 1505ET