By Kirk Maltais

--Wheat for July delivery rose 2.4% to $7.44 1/2 a bushel, its highest close since February 2013 on the Chicago Board of Trade.

--Corn for July delivery rose 1.6% to $7.08 a bushel, its highest close since March 2013.

--Soybeans for July delivery rose 0.2% to $15.45 1/2 a bushel, its highest close since November 2012.

HIGHLIGHTS

Rocket Ride: Grain futures across the board jumped again Wednesday. "While the market does have supportive news such as the ongoing crop stress in Brazil and the need for rationing, these are not new stories," said Karl Setzer of AgriVisor. "There [is] some thought rains will slow plantings in the U.S. next week, but not enough to drop progress behind average." Wheat futures gained the most, being less overbought than soybeans or corn.

No Big Deal: The USDA confirmed this morning that China canceled 140,000 metric tons of corn it previously agreed to purchase for delivery in the 2020/21 marketing year. But that didn't derail buying momentum for corn. "China canceled old crop corn sales today and it can barely keep July corn negative on the day. This is bullish price action," said Craig Turner of Daniels Trading. "Cash prices are strong, planting progress is good but not great, and the market still needs to ration demand."

INSIGHTS

Break In The Weather: Weather in U.S. crop-growing areas should improve in the coming days - particularly in parched areas like the northern plains. "Beneficial precipitation is still expected through Sunday from north--central Montana into South Dakota and southwestern North Dakota," said Terry Reilly of Futures International. "This will help raise soil moisture in the southwest part of the most drought--stricken area of the Northern Plains; though, more precipitation will still be needed." Temperatures are expected to dip to below freezing at certain points through the rest of the week, which may damage any emerging crops in the Plains.

Longer View: Grain prices are expected to moderate as the year continues, but some analysts don't think they'll drop off their current levels by much. "High prices can therefore still be expected, especially as inventories of both products are hardly likely to rise in the US," said Commerzbank. "Though planting is underway, the distribution of U.S. acreage is still not clear, making for correspondingly high levels of uncertainty." The bank forecasts that for the fourth quarter of 2021, CBOT wheat will have an average price of $6.70 per bushel, $5.50 per bushel for corn and $13.50 per bushel for soybeans.

Pumping the Brakes: After falling for 10 consecutive weeks, U.S. ethanol inventories have grown this week, according to data from the EIA. In its latest report released this morning, ethanol inventories rose approximately 700,000 barrels to 20.4 million barrels for the week ending April 30, up from 19.7 million barrels last week. It's the first time since early February that stocks have risen. Analysts surveyed by Dow Jones had forecast ethanol inventories to drop, totaling anywhere from 19 million barrels to 19.69 million barrels. Meanwhile, ethanol production rose 7,000 barrels per day to 952,000 barrels per day, according to the EIA. It's the highest production since early April.

AHEAD:

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

--Beyond Meat Inc. will release its first quarter earnings after the stock market closes Thursday.

--The CFTC will release 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

May 05, 2021 15:42 ET (19:42 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.