By Kirk Maltais
--Wheat for September delivery rose 1.8% to $5.32 3/4 a bushel on the Chicago Board of Trade on Wednesday, in response to indications that export buyers are purchasing larger shipments of wheat.
--Soybeans for November delivery fell 0.3% to $8.85 1/4 a bushel.
--Corn for December delivery fell 1.1% to $3.26 1/4 a bushel.
HIGHLIGHTS
On the Rise: Export demand for U.S. wheat appears to be growing, while yields in countries like France are on the decline. "U.S. wheat remains expensive in the world market, but Mexico and Latin American buying has supported recent price breaks," AgResource said. Reports of Egypt buying nearly 500,000 metric tons of Russian/Ukrainian wheat supported the uptick in CBOT futures.
Corn Fuel: U.S. ethanol production rose by 50,000 barrels per day last week, surprising traders who say a resurgence in Covid-19 cases is stifling consumption of the biofuel. Inventories also rose, after falling to their lowest levels since December 2016 in the previous week. The ethanol industry is pushing to be included in the new coronavirus aid package expected to come out of Congress.
INSIGHT
Weak Spot: A second day of the USDA not confirming any new large-scale agricultural purchases by China--after 11 straight days of buying--pressured soybeans. This, combined with weather supportive of the growth of big crops, kept a lid on CBOT grain futures. "The market looks vulnerable to more selling pressure over the near-term as improving crop conditions plus nonthreatening weather forecast could keep sellers active," said RJO Futures.
Losing Momentum: Export sales of U.S. corn are expected to significantly slump from the previous week, according to grains traders surveyed by The Wall Street Journal. Traders are forecasting corn sales to total anywhere from 500,000 metric tons to 1.65 million tons. Even if sales hit the high end of trader expectations, that would be nearly 1 million tons lower than the previous week, and only as much as the week before that. Soybean sales could also see a steep fall-off, traders say, although sales of soymeal are expected to increase over previous weeks, going as high as 475,000 tons.
Confidence Boosted: While other companies lower or withdraw profit guidance, Bunge says things are looking up for the soybean giant. After a blowout quarter driven by improvements in its agribusiness unit, CFO John Neppl says the segment's full-year results should be $100 million higher than last year's results, along with "modest improvement" in its edible oils division. Much of Bunge's improvement followed favorable shifts in ag markets, but executives say they're benefiting from Brazilian farmers heavily selling crops and growth in exports, which should continue as the U.S. harvest kicks in.
AHEAD
--Major ethanol producer Valero Energy Corp. will release its second quarter earnings report before the market opens Thursday.
--Kellogg Co. will release its second quarter earnings reports before the market opens Thursday.
--The USDA will release its latest weekly export sales numbers at 8:30 a.m. ET Thursday.
(Jacob Bunge contributed to this article.)
Write to Kirk Maltais at kirk.maltais@wsj.com
