By Kirk Maltais
-- Wheat for March delivery rose 1.3%, to $7.62 a bushel, on the Chicago Board of Trade on Tuesday in reaction to rising concerns about heightened Russian aggression in Ukraine.
-- Soybeans for March delivery rose 0.2% to $15.38 a bushel.
-- Corn for March delivery fell 0.7% to $6.79 1/4 a bushel.
HIGHLIGHTS
Supply Corridor Fears: Eyes were on the Russia-Ukraine war, with Russia mounting a bigger offensive on targets in eastern Ukraine.
"Wheat popped today on fears of a breakdown in the corridor to Ukraine," said Charlie Sernatinger of Marex in a note.
The effect of increased hostilities on the supply chain there is the main worry, according to analysts.
"There is commercial nervousness over the Black Sea brewing. Only two to three vessels per day are being released now, most of them smaller vessels, and the waiting time for inbound is now 20 to 40 days," said Mr. Sernatinger.
Money Flowing: After trading lower in the pre-market, grain futures turned around during the session.
"CBOT futures are mixed at midday with soybeans/corn/wheat enjoying another day of fund inflows," said AgResource in a note. "Managed funds appear to be putting additional money to work."
Parched Lands: Fundamentally, the weather forecast for Argentina was the main source of movement for corn and soybeans, with dryness seen later in the week. Traders are now looking toward next week, and trading based on those forecasts.
"Argentina had short-term relief to drought-stricken areas ... forecasts expect dryer conditions by the end of the week," said Daniel Flynn of Price Futures Group in a note. "The next rain event is slated for the middle part of this week across western and southern parts of Argentina, away from the larger producing areas."
INSIGHT
Accumulating Crops: One factor that has been pressuring U.S. wheat is competition from Russian exports, which are exceedingly cheap amid a bumper crop there.
Russian on-farm wheat stocks were estimated to be 22.1 million metric tons as of Jan. 1, according to Rosstat data processed by SovEcon. That is 42% higher than the average for the past five years, according to the firm.
While this count doesn't account for all stocks in Russia, SovEcon forecasts that this is a sign of a record pace of exporting in the coming months.
Barrel Bulge: Analysts surveyed by Dow Jones are forecasting ethanol inventories in the U.S. to rise in this week's report from the EIA, with inventories potentially climbing to 25.45 million barrels. If it rises that much, it will be the highest inventories have been since early April 2022.
The expectation of growing ethanol inventories comes as traders see a drop in fuel demand impacting corn futures.
"CBOT corn is lower from weakness in U.S. energy markets and widespread commodity selling," said Terry Reilly of Futures International in a note.
AHEAD
-- The EIA is scheduled to release its weekly ethanol production and stocks report at 10:30 a.m. EST Wednesday.
-- The USDA is due to release its monthly grain crushings report at 3 p.m. EST Wednesday.
-- Corteva Inc. is scheduled to release its fourth-quarter earnings report after the stock market closes on Wednesday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
01-31-23 1534ET
