By Kirk Maltais

-- Wheat contracts for March delivery fell 0.8% to $5.21 a bushel at the Chicago Board of Trade Tuesday.

-- January soybean contracts rose 0.6% to $9.15 a bushel.

-- Corn contracts for March delivery gained 0.2% to $3.84 3/4 a bushel.

HIGHLIGHTS

Market Lifts Back Up Following Initial WASDE Slide: U.S. grain futures perked back up after initially sliding following the afternoon release of the World Agricultural Supply and Demand Estimate (WASDE). Analysts noted that although the report arrived in line with predictions, waiting for more clarity on the U.S.-China trade truce may be more prudent.

"My take is that the futures market is awaiting hard evidence/hard news of fresh Chinese soybean purchases sometime between now and the end of the week," said Mike Zuzolo of Global Commodity Analytics and Consulting.

Corn Finishes Up Despite Cut in Ethanol Usage: Corn futures for March delivery finished slightly higher Tuesday, despite the USDA confirming it expects lower corn usage for ethanol -- reducing its bushel projection by 50 million to 5.6 billion bushels. Additionally, the USDA expects to see higher foreign corn production in Ukraine, the European Union, and Thailand.

However, the market was not shocked by the development.

"The 50 mbu reduction in ethanol usage was the most dramatic change from the USDA today, but this was also not a complete surprise as margins have been struggling and plants have been slowing grind for the last few months," said Doug Berman of RCM Alternatives.

Wheat Futures Down on Cut Forecast: The USDA said in the WASDE that it had lowered its U.S. wheat export forecasts by 25 million bushels, to roughly 1 billion, while raising ending supplies for 2018-2019 by 25 million bushels to 974 million. This caused wheat futures to close down 0.8% from Monday.

INSIGHT

Geopolitics Continue to Be the Chief Mover of Futures: News Tuesday that the U.S. and China have begun a new round of trade talks, with a phone call between U.S. Treasury Secretary Steven Mnuchin, U.S. Trade Representative Robert Lighthizer, and Chinese Vice Premier Liu He discussing the purchasing of U.S. agricultural products by China, inspired new hope that President Trump's promises may come true. Soybeans continue to be the main commodity to watch by analysts assessing the likelihood of China's re-entry to buying U.S. agriculture.

AHEAD

-- USDA is scheduled to release weekly export sales data Thursday.

-- USDA releases its county estimates for durum wheat, spring wheat, winter wheat, oats and barley Thursday.

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

(END) Dow Jones Newswires

December 11, 2018 16:02 ET (21:02 GMT)

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