By Kirk Maltais

--Wheat for March delivery rose 4.4% to $5.66 3/4 a bushel on the Chicago Board of Trade on Tuesday, in reaction to a reduced wheat harvest estimate in Australia and hope for soon-to-come tariff exemptions from China.

--Corn for March delivery rose 1.4% to $3.83 a bushel.

--Soybeans for March delivery fell 0.2% to $8.92 1/4 a bushel.

HIGHLIGHTS

Less Wheat From Down Under: Australia is likely to have the smallest wheat crop in more than a decade after widespread brushfires stifled the harvests. Crop agency ABARES estimates the 2019 wheat crop will total 15.2 million metric tons, down from 15.85 million tons previously. The new forecast is a 12% drop from the 2018 crop, according to USDA figures.

More China Hopes: The U.S. and China each signaled that they intend to follow through with the phase one trade deal. Chinese officials said Beijing aims to exempt some 697 U.S. products, including farm goods, from tariffs beginning March 2, while President Trump tweeted that "The United States cannot, & will not, become such a difficult place to deal with in terms of foreign countries buying our product." China is expected to be particularly interested in hogs and soybeans.

INSIGHT

Corn Catch-Up: Corn export inspections hit their highest level since May, according to USDA data, but analysts at INTL FCStone say exports are still behind schedule. Corn inspections totaled 31.3 million bushels in the week ended Feb. 13, while the USDA projects the U.S. will ship out 1.725 billion bushels of corn for the marketing year.

Shorts on Fire: Grains traders have built large short positions in soybeans and corn, according to data released by the CFTC on Friday. Through Feb. 11, managed money traders have built a net short position of nearly 100,000 contracts in soybeans, a "historically large" position, according to Doug Bergman of RCM Alternatives. Corn futures were net short by roughly 70,000 contracts.

AHEAD

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

--Deere & Co. reports its first-quarter earnings before the market opens Friday.

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

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

(END) Dow Jones Newswires

February 18, 2020 15:45 ET (20:45 GMT)

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