By Kirk Maltais
--Wheat for March delivery fell 1.1% to $6.58 1/4 a bushel, on the Chicago Board of Trade Wednesday, with grain traders opting to short wheat as a hedge for their long positions in soybeans and corn.
--Corn for March delivery rose 0.3% to $5.34 a bushel.
--Soybeans for March delivery rose 0.3% to $13.74 3/4 a bushel.
HIGHLIGHTS
Hedgehogs: Grain traders seeking to balance positions used wheat futures as a short hedge for long positions in corn and soybeans - pushing wheat futures lower Wednesday ."The wheat/corn spread has narrowed to a premium of $1.24 per bushel with corn being the bullish stalwart," said AgResource. Also pressuring wheat futures was supportive weather in the Black Sea for the winter wheat crop.
New Wave: The USDA this morning confirmed another big buy of U.S. corn exports by China, helping push corn to new multi-year highs in pre-market trading. Traders are keeping a close eye on the Beijing buying trend, "...from what we hear there seems to be more of it around and therefore will be hard for the market to break lower," said Marex Spectron. Despite the early enthusiasm, corn's gain was quickly pared in trading later in the day.
INSIGHTS
Slimmer Stockpile: Inventories of U.S. ethanol shrank slightly this week, dropping 26,000 barrels to 23.6 million barrels, according to data released by the EIA Wednesday. Traders informally surveyed by Dow Jones had largely expected them to rise. Overall, inventories of ethanol in the U.S. remain high - but daily ethanol production has dropped. U.S. production averaged 933,000 barrels per day this week, down 12,000 barrels from the previous week. Speculation that China will buy more U.S. ethanol exports has been a factor pushing corn futures higher this week.
Flatlining: U.S. grain export sales are expected to hit a plateau this week, according to traders surveyed by The Wall Street Journal. Corn sales are expected to be anywhere from 900,000 metric tons to 1.6 million tons, according to traders - while soybeans are expected to be anywhere from 800,000 tons to 2.5 million tons. If export sales come in on the high end, then it'll be close to the same totals from last week. Large flash sales reported by the USDA this week are not going to be included in this week's report, but will show up on next week's report.
New Relief Measures: More government relief is on the way for U.S. farmers, as the USDA is temporarily suspending past-due debt collections and foreclosures for distressed borrowers under some USDA-administered loan programs. While agricultural commodity prices have surged in recent months, and an estimated $46 billion in government payments went to the Farm Belt in 2020, the USDA said Covid-19's impact on the farm sector continues to weigh on farmers' pocketbooks. The suspension, which doesn't have an end date so far, will be available to more than 12,000 borrowers, or nearly 10% of the agricultural producers who use the USDA loan programs.
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 export inspections report at 11 a.m. ET Monday.
--The USDA will release its monthly grains crushing report at 3 p.m. ET Monday.
Jacob Bunge contributed to this article.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
01-27-21 1544ET
