By Kirk Maltais


--Soybeans for November delivery fell 1.6% to $14.55 a bushel on the Chicago Board of Trade Wednesday, with grain traders cautious about the possibility of rail workers going on strike.

--Corn for December delivery fell 1.5% to $6.82 1/4 a bushel.

--Wheat for December delivery rose 1.4% to $8.72 1/4 a bushel.


HIGHLIGHTS


Scoping Out the Scene: The possibility of a strike by rail workers beginning on Friday has the agricultural market concerned about the fate of grain shipments in the near-term - with railcars holding grain shipments expected to be halted today. A strike could cost the American economy roughly $2 billion per day, according to the Association of American Railroads, and markets across the board are expected to feel the squeeze. For agriculture in particular, rail systems are very important - with railcars transporting roughly 33% of the grain set to be exported to other nations, according to the Association.

Offloading Data: Tomorrow's release of export sales by the USDA's Foreign Agricultural Service is expected to cover all data that's been left unreleased since the agency retracted its report on August 25 - the first report using a new system. Tomorrow's report - which will contain data from three missed reports in addition to the most current week - will return to the old system that traders are accustomed to using. Overall, traders are cautious in their expectations for these reports. "Almost impossible to predict what the USDA will put out after missing the past four weeks," Brian Pullam of Linn & Associates told the WSJ.

Stiff Competition: Soybeans caught a lift earlier this week due to Monday's supportive WASDE report - which reduced the USDA's U.S. soybean yield by more than expected. However, attention of traders has since turned towards how other world markets may fare. "Our recent WASDE data was supportive for soybeans, however it is expected that there will be a record breaking 2022/23 crop in Brazil," said Donna Hughes of StoneX in a note. In its last report, Brazilian crop agency Conab said that Brazil's 2022/23 soybean crop is expected to be 150.3 million metric tons, which is up 21% from the previous year.


INSIGHTS


Harvest Time: While concerns about the rail worker strike are putting pressure on CBOT grain futures, seasonality is also at play - with harvesting soon to begin in earnest. The flow of new-crop into the market comes at a time where prices are already too high for many buyers. "I suspect impending harvest and the fact that U.S. products are not competitive in global markets are keeping buyers at bay," Dan Hueber of the Hueber Report told the WSJ.

Fueling the Fire: Ethanol is a commodity that is especially vulnerable to a rail disruption, said S&P Global Commodity Insights in a note. The firm says 70% of U.S. ethanol is shipped by rail, with Midwest production usually going by rail to both coasts. As a result, spot prices of ethanol have surged. and gasoline prices could surge as well, as ethanol accounts for roughly 10% of gasoline volume, according to S&P Global. In its latest weekly report, the EIA said that daily ethanol production declined to 963,000 barrels per day for the week ended September 9, a drop-off from 989,000 barrels per day the previous week. It's the lowest daily ethanol production figure since late April.


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.

--The USDA will release its weekly crop progress report at 4 p.m. ET Monday.


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


(END) Dow Jones Newswires

09-14-22 1540ET