By Kirk Maltais

-- Wheat contracts for March delivery rose 1%, to $5.26 1/2 a bushel, at the Chicago Board of Trade Tuesday.

-- January soybean contracts rose 0.6%, to $9.20 a bushel.

-- Corn contracts also rose for March delivery to 0.1%, to $3.85 1/4 a bushel.

HIGHLIGHTS

Trump Comments Boost Soybean Sentiment: Statements from President Trump that China is "buying tremendous amounts of soybeans" instilled a new wave of optimism into the grains markets--this despite yesterday's USDA report that kept its figures for soybeans largely unchanged. Analysts say that Mr. Trump's comments lent credence to the widespread rumors that state-owned Chinese companies are buying 5 million-8 million tons of soybeans out of the Pacific Northwest for state reserves.

Soybean Buy Considered Evidence of Chinese Return: Also lifting soybean futures was this morning's announcement by the USDA of sales of 130,632 tons of soybeans to Mexico, with another 110,000 tons sold to "unknown destinations" that some on the market thought to be China. This, combined with claims of other buys by Chinese companies, drove the sentiment that China would soon be buying beans with regularity from the U.S. "I think the general discussion point is the size of the purchases made by China in the coming weeks," said Rich Nelson of Allendale Inc.

INSIGHT

Ethanol Production Shows Declines: Data released by the EIA shows ethanol production down 23,000 barrels for the week at 1.046 million barrels per day, with U.S supply of ethanol down 140,000 barrels to 22.89 million. This is bearish for corn futures, compounded by the USDA's forecast of lower corn usage in ethanol production.

World Events of Chief Concern for Soybeans: The ongoing geopolitical struggle regarding the fate of arrested Huawei Technologies finance chief Meng Wanzhou continues to play out, with Ms. Meng granted bail by a Canadian judge. President Trump also commented that he is ready to intervene in the case if it will aid trade relations between the U.S. and China--all of which is crucial for soybeans growers that need the trade deal to work out to allow for soybean sales to China to again commence.

AHEAD

--USDA releases its weekly export sales data on Thursday. Analysts surveyed by Dow Jones expect wheat exports of 500,000-800,000 tons, corn exports of 850,000-2 million tons, soybean exports of 900,0000-1.15 million tons, soymeal exports of 225,000-450,000 tons, and soyoil exports of 10,000-25,000 tons.

--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 12, 2018 15:51 ET (20:51 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.