By Kirk Maltais
--Wheat for December delivery fell 1% to $5.58 1/4 a bushel on the Chicago Board of Trade on Wednesday, with grains traders selling off wheat after it rallied to a four-month high in the previous session.
--Corn for December delivery rose 0.2% to $3.58 3/4 a bushel.
--Soybeans for November delivery rose 0.8% to $9.62 a bushel.
HIGHLIGHTS
Cue the Profits: Wheat traders took profits after prices rallied for two days. Forecasts of a larger Russian crop also prompted selling. "Wheat was down all day long on more increases in Russian crop estimates and profit taking, throw in some intermarket spreading for good measure," said Charlie Sernatinger of ED&F Man Capital.
Turning the Water On: Rainfall is washing away recent strength in grains futures. The precipitation hit the Southern Plains and the Midwest Wednesday, according to DTN. Additionally, the firm said, "a strong system will bring scattered showers and falling temperatures early-to-mid next week." While the rains are putting a damper on drought concerns, grains traders are questioning how beneficial these rains will actually be for the 2020 crop, with Karl Setzer of AgriVisor calling their benefit "questionable."
INSIGHTS
Question of Severity: September's WASDE report may prove to be bearish for CBOT grains futures, said Craig Turner of Daniels Trading. "The market has priced in a good bit of yield loss in both corn and beans," Mr. Turner said. "We could see a bearish surprise against expectations in the Sept. 11 WASDE." Adverse weather conditions including a derecho in the Midwest and drought conditions in some areas are expected to impact these figures -- albeit not as much as the market has priced in, Mr. Turner said. Meanwhile, commodity brokerage Allendale Inc. forecast the 2020 US corn yield at 178.3 bushels per acre and soybean yields at 51.9 bushels per acre, a limited movement from the adverse weather.
Hitting the Brakes: U.S. ethanol inventories are on the rise, the EIA says. Ethanol stockpiles are at 20.88 million barrels, the EIA said, an uptick of 473,000 barrels from last week. Meanwhile, U.S. ethanol production fell by 9,000 barrels per day, totaling 922,000 barrels per day. For corn traders, the report is bearish, as it indicates that a post-coronavirus recovery to the ethanol industry is on hold. For inventories, this week's figure is the highest they've been since mid-June.
Double Trouble: Some grains traders expect total export sales of U.S. corn ending August 27 to almost double those of the previously reported week. Traders surveyed by The Wall Street Journal forecast that sales of corn could total as much as 2.7 million metric tons this week - which would be close to double of the 1.45 million tons reported last week. Sales to China would be the main driver for the boost, with China confirming over 1.1 million tons of U.S. corn export purchasing last week alone. Optimism about China's boost in purchasing of U.S. agriculture exports has been a factor pushing grains futures higher this week.
AHEAD
--The USDA will release its latest weekly export sales numbers at 8:30 a.m. ET Thursday.
--The CFTC releases its weekly commitment of traders report at 3:30 p.m. ET Friday.
--The Chicago Board of Trade will be closed Monday in observance of the Labor Day holiday, reopening on Tuesday.
Write to Kirk Maltais at kirk.maltais@wsj.com
