By Kirk Maltais


--Corn for May delivery rose 0.8%, to $6.56 a bushel, on the Chicago Board of Trade on Wednesday, with traders evaluating supplies as tight even though the USDA didn't cut its ending inventories forecast in yesterday's WASDE report.

--Wheat for May delivery rose 0.8% to $6.79 1/2 a bushel.

--Soybeans for May delivery rose 0.5% to $15.04 1/4 a bushel.


HIGHLIGHTS


Picking Up Quickly: Grain traders today shook off any reaction to yesterday's anti-climatic WASDE report, instead trading with more focus on the near-future. "The feature of the day today is bull spreading," said Brian Splitt of AgMarket.net. "Trade is acknowledging that even though USDA did not revise old crop corn and soybean stocks lower, old crop is still tight and cash markets support that narrative." Basis prices - prices paid for grains by elevators and other buyers - for both corn and soybeans are mostly elevated from this time last year, according to data from StoneX.

Outside Activity: New CPI data showed inflation at its lowest level in two years, which provided wider markets with a boost, which trickled down to commodities as funds looked to them as an investment opportunity. "The outside markets are generally supportive this morning with the equity and crude oil market trading higher and the dollar weaker," said Tomm Pfitzenmaier of Summit Commodity Brokerage.


INSIGHT


Growing Risk: Grain traders have become resistant to fear about a dissolution of the Black Sea Grains Initiative, but some are starting to think that Russia's latest threats to dissolve the deal may have legs. "We fear that the market may be underestimating the risk of the talks breaking down," said Commerzbank in a note. "Just how important the seaborne grains corridor has become for Ukraine is clear from the problems it is having transporting grains exports by land." The firm adds that a temporary Polish ban on Ukrainian grain exports instituted last week could be an indicator of what might happen if a flood of Ukrainian grain is no longer able to be transported via water.

Stubborn Drought: Areas of the U.S. Plains still locked in extreme or exceptional drought are expected to see little rain relief within the next two weeks. "The 11-15 day period hints on some rain, but our confidence stays low," said AgResource in a note. "The odds are high that the Plains drought will deepen into May." The U.S. Drought Monitor reported last week that areas of extreme and exceptional drought are present across Kansas, Oklahoma, Texas, and Nebraska. The dry conditions are impacting wheat the most, with winter wheat crop conditions at only 27% good or excellent condition as of Monday's Crop Progress report from the USDA.


AHEAD


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

--The CFTC will release its weekly Commitment of Traders report at 3:30 p.m. ET Friday.

--The USDA will release its weekly grains export inspections report at 11 a.m. ET Monday.

--The USDA will release its weekly crop progress report at 4 p.m. ET Monday.


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


(END) Dow Jones Newswires

04-12-23 1504ET