By Kirk Maltais


--Soybeans for May delivery fell 0.8% to $15.17 3/4 a bushel on the Chicago Board of Trade on Tuesday, with traders preparing for surprises out of the WASDE report by paring their exposure in long positions.

--Corn for May delivery fell 0.3% to $6.35 1/4 a bushel.

--Wheat for May delivery rose 0.3% to $6.98 a bushel.


HIGHLIGHTS


Prep Time: Trading was generally quiet ahead of the USDA's monthly estimates, to be released on Wednesday, with fund traders paring some risk by reducing exposure to large long positions in grains, particularly corn. There is room for further selling if the WASDE report contains unexpected forecasts for higher supplies and lower demand, said Doug Bergman of RCM Alternatives in a note.

Counter Action: Positioning ahead of the WASDE also extended to wheat, said Karl Setzer of Mid-Co Commodities. "Funds are heavily short in wheat and the complex is oversold so buyers covered some of these positions," Mr. Setzer told the WSJ.

All Fed Up: Comments from Federal Reserve Chairman Jerome Powell weighed on commodities, with metals, energy and grains all pressured by indications the central bank may accelerate interest rate increases to tame strong economic activity. "Powell's comments set the tone for both the commodities and the equities this morning," Arlan Suderman of StoneX said in a note. The U.S. dollar index rose roughly 1% in the afternoon.


INSIGHT


Taking Their Cues: "In the short term, Russian FOB (wheat) prices are expected to decrease further as the country needs to regain its competitive edge," Andrey Sizov of SovEcon said in a note. U.S. wheat futures have slid more than 12% in the past month, weighed down by cheaper exports. Mr. Sizov said prices only have limited room to fall further. "It is challenging for Russian exporters to pass on lower export quotes to the domestic market as farmers remain reluctant sellers," Mr. Sizov said.

Looking For Decline: U.S. ethanol inventories are expected to slide in the EIA's next report, according to analysts surveyed by Dow Jones this week. Analysts forecast inventories to decline to as low as 24 million barrels, which would be the lowest since mid-January. Ethanol has also been impacted by concerns about Mexico cutting its imports of U.S. GMO corn. "The Mexico news could cut U.S. exports for ethanol and biofuels as other countries are expanding use for U.S. ethanol and biofuels," said Daniel Flynn of Price Futures Group in a note.


AHEAD


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

--The USDA will release its monthly world supply and demand report at noon ET Wednesday.

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


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

(END) Dow Jones Newswires

03-07-23 1539ET