By Kirk Maltais
-- Wheat for December delivery rose 1.7% to $6.11 a bushel Wednesday on the Chicago Board of Trade, coming back from a long holiday weekend with heat still hitting U.S. crops.
-- Soybeans for November delivery rose 0.7% to $13.76 a bushel.
-- Corn for December delivery was unchanged at $4.86 1/4 a bushel.
HIGHLIGHTS
Bombs Away: Fresh fighting in the Black Sea was a driver for higher prices, said Joel Karlin of Ocean State Research with new hostilities expected to further complicate shipping in the area.
"Headlines to support the market include Russia again attacking both Odesa and the Danube River port of Izmail with drone strikes, damaging several agricultural and port facilities," said Karlin, adding that a lower expected output from Australia is also lifting prices.
Burnt Out: Grain futures got a lift overnight after the USDA reported Tuesday afternoon that U.S. crop quality has taken a sizable slide on hot late summer conditions. The USDA's crop progress report showed U.S. corn in good or excellent condition is at 53%, down three points from the previous week. Soybeans in good or excellent condition fell five points to 53%.
The declines seen in this week's report were particularly supportive for soybeans, said Tomm Pfitzenmaier of Summit Commodity Brokerage in a note.
Mitigating Momentum: Pressure hit grains later in the trading session, driven in part by export demand expectations for U.S. grains continuing to be mediocre. One factor affecting them is lower water levels in key shipping lanes.
"Early buying from crop condition drops ran out of steam," said Brian Splitt of AgMarket.net. "Demand concerns are still an issue and water levels at Mississippi River and Panama Canal will not help those concerns." Low water levels limit the amount of barges that can travel and the amount of inventory they can carry.
INSIGHT
Cranking Up the Heat: While hot weather is unquestionably impacting crops in some growing areas of the U.S., better conditions seen elsewhere throughout the season are expected to balance the distressed areas out, said Scott Brown of University of Missouri's Rural and Farm Finance Policy Analysis Center. The university conducts a monthly survey of economists, with the most recent release showing positivity for the U.S. agricultural market.
Swinging Back: Analysts surveyed by Dow Jones are forecasting U.S. ethanol inventories to slide, falling by as much as one million barrels in the EIA's weekly report due Thursday. If they do fall this low -- to roughly 20.6 million barrels -- it will be the lowest stocks have been since December 2021. Dropping inventories would suggest higher demand for ethanol than current production.
AHEAD
-- The EIA is scheduled to release its weekly ethanol production and stocks report at 10:30 a.m. EDT Thursday.
-- The USDA is due to release its weekly export sales report at 8:30 a.m. EDT Friday.
-- The CFTC is scheduled to release its weekly Commitments of Traders Report at 3:30 p.m. EDT Friday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
09-06-23 1541ET
