By Kirk Maltais 
 

--Corn for March delivery rose 1.3% to $3.93 3/4 a bushel on the Chicago Board of Trade Thursday, with global prices rising amid reports that a weather-damaged U.S. crop can't be used for animal feed purposes.

--Wheat for March delivery rose 0.5% to $5.80 1/2 a bushel.

--Soybeans for March delivery fell 0.5% to $9.09 1/2 a bushel.

HIGHLIGHTS

Subpar Corn?: Traders piled into corn futures Thursday in response to a report from Reuters stating that some Asian feed-makers are turning to Ukraine to fill their supply needs instead of the U.S., and are willing to pay more. Weather-damaged crops have limited U.S. corn availability, making high-grade corn more difficult for Asian buyers to get. "This argument of U.S. corn versus Ukraine, I think that's playing out," said Rich Nelson of Allendale Inc.

Waiting Game: Without any confirmation of large Chinese purchases of U.S. agriculture, grain futures were generally weaker Thursday. "It's been over a week since the Phase 1 agreement was signed and we do not know any more about China's prospective demand than we did prior to the agreement," says Karl Setzer of AgriVisor.

INSIGHT

Flipping the Switch: Grains traders think that corn export sales, which the USDA will reveal in tomorrow's weekly report, could exceed 1 million metric tons--a noteworthy turnaround for an agricultural good that has suffered with low export demand throughout 2019. Traders polled by The Wall Street Journal estimate that corn sales could total anywhere from 500,000 tons to 1.2 million. If it lands on the high end of that range, CBOT corn futures may respond positively to the indication of improving demand.

Ethanol Overflow: Inventories of U.S. ethanol have grown by nearly 3.8 million barrels in the past two months, according to data from the EIA. Since Nov. 22, stocks of ethanol have swelled, growing to just over 24 million barrels this week. It is the highest level of ethanol inventories since late July 2019. The data appear bearish for ethanol demand, with production dropping by 46,000 barrels per day to 1.05 million barrels per day. However, the building of ethanol stocks may be in preparation for huge orders from China later in the year.

Viral Message: Coronavirus, a cousin of the SARS virus that originated in Wuhan, China, is putting pressure on soybean futures this week--a contributing factor to why the March contract is down over 2% since the start of the week. If the World Health Organization says anything Thursday to exacerbate market concerns about the virus' spread, then soybean futures may be hit further, said Brian Pullam of Linn & Associates.

AHEAD:

--The USDA will release its latest weekly export sales numbers at 8:30 a.m. ET Friday.

--The CFTC releases its weekly commitment of traders report at 3:30 p.m. ET Monday.

--The USDA releases its weekly grain export inspections data at 11 a.m. ET Monday.

(END) Dow Jones Newswires

January 23, 2020 15:57 ET (20:57 GMT)

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