By Kirk Maltais


--Wheat for December delivery fell 1% to $5.71 1/4 a bushel, on the Chicago Board of Trade on Tuesday, with China apparently looking to Australia for grain purchases.

--Corn for December delivery fell 0.3% to $4.88 3/4 a bushel.

--Soybeans for November delivery rose 0.9% to $12.97 3/4 a bushel.


HIGHLIGHTS


Turn Around: China's flash of interest in U.S. wheat exports may be over, said Steve Freed of ADM Investor Services. In a note, Freed speculates that China's focus may be shifting from the U.S. to Australia. Yesterday's grain export inspections report from the USDA showed little in the way of U.S. wheat shipments heading to China, with the majority going instead to Japan - lending credence to the speculation.

Mounting Frustration: A lack of an apparent trend for CBOT grain futures is vexing traders, said AgResource in a note. "The bears are frustrated that the CBOT won't break while the bulls are frustrated that grain rallies can't be sustained," said the firm. As a result, volumes were lightly traded today - keeping prices rangebound until fresh news sparks a new direction.

Issues in South America: The spotlight for the soybean market is on South America. "Brazil remains hot and dry in northern areas and too wet in southern areas," said Jack Scoville of Price Futures Group in a note -- adding that dryness in Argentina is also a factor for prices. Soybeans have recently taken cues from upticks in soyoil, however, soyoil futures closed 1% lower -- suggesting other factors are lifting soybeans.


INSIGHT


Shrinking Outlook: The prospects for Russia's wheat crop continue to worsen, said SovEcon in a note. The firm cut its 2023/24 Russian wheat forecast to 91.4 million metric tons from 91.6 million metric tons -- due to deteriorating crop prospects in the Urals and Siberia regions. Drought conditions are impacting crop development in Siberia, and could result in substantial acreage abandonment, said SovEcon - which may ease Russia's flow of wheat onto the export market.

Ahead of Pace: The pace of harvesting corn and soybeans in the U.S. remains faster than usual, according to the USDA's latest Crop Progress report. The corn harvest is 45% complete, while the soybean harvest is 62% done. Both of these figures are ahead of last year's pace, as well as the average pace over the past 4 years. "It is hard to rally the market in the middle of harvest," said Tomm Pfitzenmaier of Summit Commodity Brokerage in a note.

Fueling a Rally: There's a bullish signal for corn as analysts surveyed by The Wall Street Journal forecast tomorrow's EIA report to show an upturn in average daily production of U.S. ethanol. They see production ranging from 1 million barrels a day to 1.02 million barrels a day, versus 1.004 million barrels a day reported last week. Meanwhile, inventories of ethanol are largely expected to decrease from 21.53 million barrels reported last week, to between 21 million barrels and 21.63 million barrels - giving the impression of healthy demand.


AHEAD


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

--The Federal Reserve Banks will release the Beige Book at 3 p.m. ET Wednesday.

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

--The USDA will release its monthly Livestock Slaughter report at 3 p.m. ET Thursday.


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


(END) Dow Jones Newswires

10-17-23 1550ET