By Kirk Maltais


--Wheat for December delivery surged 7.6% to $8.93 3/4 a bushel on the Chicago Board of Trade Tuesday after Russia said it would attempt to formally annex captured areas of Ukraine.

--Corn for December delivery rose 2% to $6.92 a bushel.

--Soybeans for November delivery rose 1.2% to $14.78 3/4 a bushel.


HIGHLIGHTS


Annexation Agitation: Russia's plans to annex Russian-occupied regions of Ukraine has CBOT wheat futures higher. The move signals more prolonged fighting in the nearly seven-month conflict. "I think comments today from Moscow saying that there are no prospects for a negotiated end to the war in Ukraine and giving its blessing to efforts to swiftly bring regions already captured under Russia's complete control indicate this will remain a protracted affair, " Joel Karlin of Western Milling told the WSJ. Other factors, including hot weather in wheat-growing regions of the U.S., also lifted wheat futures.

Back to Basics: Apprehension ahead of the Federal Reserve's expected rate hike Wednesday appeared to give way to weather-related concerns in trading, said Rich Nelson of Allendale Inc. "One balancing factor in the short term may be the continued discussion with Argentina's corn planting and potential yields," Mr. Nelson told the WSJ. "U.S. Plains dryness, and forecasts for it to continue, are balancing factors for wheat as well." However, Mr. Nelson still ranks crude oil prices, a higher U.S. dollar and expectations for higher interest rates as "clear concerns" going forward.


INSIGHTS


Declining Conditions: U.S. corn and soybean conditions are diminishing. The USDA reported another round of declines in its latest weekly Crop Progress report. The USDA now sees corn conditions at 52% good-to-excellent, down one point from last week. Soybeans are now 55% good-to-excellent condition, which is also down one point. The drop in conditions comes as harvesting starts. The USDA says 7% of the corn crop has now been harvested, versus a five-year average pace of 8% for this time of year. Soybean harvesting is 3% complete, versus a normal five-year rate of 5%.

Losing Steam: Daily production of ethanol in the U.S. is expected to keep declining, according to analysts surveyed by Dow Jones. They forecast daily ethanol production will land from 946,000 barrels per day to 958,000 barrels per day through September 16, down from 963,000 barrels per day reported last week. Meanwhile, ethanol inventories are also expected to fall, with inventories possibly declining to as low as 22 million barrels - the lowest they've been since December of last year.


AHEAD:


-General Mills Inc. will release its first-quarter earnings report on Wednesday before the stock market opens.

--The EIA will release its weekly ethanol production and stocks report at 10:30 a.m. ET Wednesday.

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

-The USDA will release its monthly Cold Storage report at 3 p.m. ET Thursday.

-The USDA will release its monthly Livestock Slaughter report at 3 p.m. ET Thursday.


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


(END) Dow Jones Newswires

09-20-22 1521ET