By Kirk Maltais

--Corn for March delivery rose 1.6% to $3.86 1/2 a bushel on the Chicago Board of Trade on Tuesday, with traders speculating that the supply of cheap South American corn is running low, making U.S. grain more competitive.

--Soybeans for March delivery fell 0.3% to $8.95 a bushel.

--Wheat for March delivery fell 0.5% to $5.69 3/4 a bushel.

HIGHLIGHTS

Demand Hope: Big export sales reported by the USDA for the past two days have grains traders hopeful that demand for U.S. corn is growing. "Exportable cheap South American supplies are finally drying up, which should enable the shipment pace to pick up in the weeks ahead," said Arlan Suderman of INTL FCStone.

Upside Overdone: Wheat prices are slightly lower in Paris and Chicago, having outperformed other agricultural commodities in January. "Even though the market has been tight, the advance has been overdone," said Nicolas Robin, who manages commodity investments at Columbia Threadneedle. Wheat prices have risen too far above corn prices, Mr. Robin said, encouraging farmers to feed their animals with corn instead of wheat.

Palm Reading: A drop in Malaysian palm-oil futures based on the outbreak of coronavirus and its impact on Asian demand was felt in soybean-oil futures. The soybean-oil market rode palm oil's momentum through the end of 2019 and is now down 11% to roughly 31 cents a pound since the start of 2020, with most of that fall occurring in the past week.

INSIGHT

Lingering: Traders are taking a step back from soybeans amid worries about the coronavirus in China, a large Brazilian crop and Beijing's mild demand for U.S. beans. "Expect soybean prices to continue reflecting a risk-off scenario over the next few weeks," said Todd Hubbs of the University of Illinois. The uncertainty stemming from coronavirus will continue to linger, as well as pessimism around the U.S.-China phase one deal unless Beijing starts making large purchases after the Lunar New Year holiday, Mr. Hubbs said.

USMCA Day: The U.S.-Mexico-Canada Agreement, otherwise known as the USMCA, is expected to be signed into law by President Trump on Wednesday, according to several reports. The signing isn't likely to have much effect on CBOT grain futures, said John Payne on Daniels Trading. "In reality, Mexico has been buying a lot of U.S. ag products this entire time, " Mr. Payne said. "Outside of a sharp move in the peso or looney, I don't think their market position will change much."

AHEAD

--The EIA releases its weekly update on ethanol production and inventories at 10:30 a.m. ET Wednesday.

--Mondelez International Inc. (MDLZ) reports fourth-quarter results at 4:05 p.m. ET Wednesday.

--Archer Daniels Midland Co. (ADM) reports fourth-quarter results after the market closes on Wednesday.

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

(Joe Wallace contributed to this article.)

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

(END) Dow Jones Newswires

January 28, 2020 16:17 ET (21:17 GMT)

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