By Kirk Maltais

--Wheat for December delivery rose 5.2% to $5.78 a bushel, on the Chicago Board of Trade on Wednesday in reaction to a more bullish-than-expected grain stocks report from the USDA as well as continued drought issues in Russia.

--Corn for December delivery rose 3.9% to $3.79 a bushel.

--Soybeans for November delivery rose 2.9% to $10.22 a bushel.

HIGHLIGHTS

Drawdown: Old crop wheat stocks totaled 2.16 billion bushels, according to the USDA's quarterly report. While this figure fell within analyst expectations, it's still the lowest wheat inventories have been since 2015. "The lower U.S. wheat stocks amplifies the dryness that is occurring throughout much of Southwestern Russia for the second consecutive year," AgResource said. The two events combined suggest wheat supplies could fall behind demand.

Low Rider: For corn and soybeans, the USDA stock report fueled a big uptick midday. Old-crop soybean stocks were reported at 523 million bushels, roughly 50 million bushels lower than trader expectations. "I think when you look at it, it was a bullish report," said Don Roose of U.S. Commodities. "Now where we're at, the burden of proof is on crop yields and production."

Dry Spell: The Ukrainian Ministry of Agriculture estimates a quarter of the winter-wheat area has been sown, AgriTel said. The situation is also worrying in southern Russia, AgriTel said. Rainfall issues in Europe and Russia have been pressuring wheat grown in those areas, although drought worries are easing in Central Europe, according to AgriTel.

INSIGHT

Export Weakness: Corn and soybean export sales are expected to be down from last week's large figures, according to grains traders surveyed by The Wall Street Journal. They estimate sales of corn could range from 800,000 metric tons to 1.4 million tons, while soybeans sales are estimated to be 1.6 million tons to 2.5 million tons. Both of these ranges are down from last week's sales but would still be considered strong among traders.

Stock Shocker: Wednesday's grains rally may be brief, traders say. "While we're quite a bit tighter on corn than we thought before the report, we're still not exactly running out," said Doug Bergman of RCM Alternatives. "With harvest ramping up around the country, look for selling interest to emerge after today's move higher."

AHEAD

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

--The USDA will release its monthly grain crushings report at 3 p.m. ET Thursday.

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

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

(END) Dow Jones Newswires

September 30, 2020 15:55 ET (19:55 GMT)

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