-- Wheat for March delivery rose 2% to $5.88 1/2 a bushel on the Chicago Board of Trade Wednesday, with grains traders taking the opportunity to restock their grain inventories after the recent dip in wheat prices.
-- Corn for March delivery rose 0.7% to $4.23 3/4 a bushel.
-- Soybeans for January delivery fell 0.8% to $11.53 a bushel.
HIGHLIGHTS
Running Low: Wheat futures trading on the CBOT have bounced back after shedding 5% in the past two days. Buying interest among end users have returned amid indications of lacking supplies.
"Many of our mills were hand-to-mouth on supplies and are anxious to buy the breaks," said Arlan Suderman of StoneX. "We're seeing end-user buying return to the market, taking advantage of the recent break in prices."
Chinese Interest: In addition to domestic end-user interest, increased export market interest served to boost both wheat and corn futures Wednesday. Market speculation that China plans on buying more exports of corn and wheat is a united factor driving both contracts up.
"Rumors abound that China has secured as much as 1 million metric tons of U.S. April corn while also asking for offers on U.S. HRW/White wheat," said AgResource.
Traders will eagerly await confirmation from the USDA Thursday or Friday morning to confirm if such buying has panned out.
Cashing Out: CBOT soybean futures fell overnight and through trading Wednesday, driven in part by wetter weather in South America as well as year-end profit-taking by managed money funds.
"Funds have made some pretty good money in the soybean market over the past couple of months and we would not be surprised to see them book some of those to defend their performance for the year," said Tomm Pfitzenmaier of Summit Commodity Brokerage.
Meanwhile, Brazilian soybean planting progress doesn't seem to have slowed down because of the incessant dryness in planting regions, with 83% of the soybean crop planted, only one point off from the previous year.
INSIGHTS
Holiday Week: Export sales of U.S. grains are expected to be down from the previous week, due to it being a holiday week last week, said Brian Pullam of Linn Group.
"It was a holiday-shortened week last week, so sales may trend a little to the lower side of estimates," said Mr. Pullam.
According to grains traders surveyed by The Wall Street Journal, corn exports are expected to be anywhere from 800,000 metric tons to 1.3 million tons, while soybean exports are forecast between 400,000 tons and 1.15 million tons. The low end of both forecasts are down from the previous week.
Keeping Status Quo: The phase one trade agreement looks to stay in place following the inauguration of President-elect Joe Biden, at least in the short term. Speaking to the New York Times, Mr. Biden said his administration won't immediately roll back tariffs or alter the terms of the current trade deal between the U.S. and China, adding the U.S. needs to "regain leverage" to bring to negotiations.
As it stands, China is behind on its promised agricultural purchases, leaving grains traders eyeing how the incoming president will address this.
Barrel Buildup: U.S. ethanol inventories are at their highest level since mid-June, according to data from the EIA. Inventory rose 374,000 barrels to 21.24 million barrels.
Meanwhile, ethanol production fell 16,000 barrels per day, down to 974,000 barrels per day, a disappointment for corn traders hoping to see a recovery in ethanol usage continuing despite the resurgence of coronavirus this fall.
"Note production is off from 990,000 posted last week, which hit its highest level since when energy demand destruction significantly increased back in late March 2020," said Terry Reilly of Futures International.
AHEAD:
-- The USDA is scheduled to release its latest weekly export sales at 8:30 a.m. EST Thursday.
-- The CFTC is due to release its weekly commitments of traders report at 3:30 p.m. EST Friday.
-- The USDA is scheduled to release weekly grain export inspections data at 11 a.m. EST Monday.
-- The USDA is due to release the weekly crop progress report for the 2020-21 crop at 4 p.m. EST Monday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
12-02-20 1538ET
