By Kirk Maltais

-- Wheat for July delivery rose 1.9% to $7.44 a bushel on the Chicago Board of Trade Tuesday. Grain traders took advantage of Monday's selling to get back into long positions ahead of Wednesday's WASDE report from the USDA.

-- Soybeans for July delivery rose 1.8% to $16.18 3/4 a bushel, the highest level since September 2012.

-- Corn for July delivery rose 1.7% to $7.24 1/4 a bushel.

HIGHLIGHTS

Regrouping Opportunity: Monday's slide in CBOT grain prices created an opportunity for funds to jump back into grain futures ahead of Wednesday's WASDE report. "The sector continues to see active buying of price breaks," said Arlan Suderman of StoneX. "Traders step aside when prices are falling, such as yesterday, but thus far few speculative traders have any interest in building short positions." In the CFTC's report Friday, managed money funds maintained near-record large long positions in grains.

Great Expectations: Monday's crop progress report from the USDA showed a big leap in the amount of corn, soybeans, and spring wheat planted by U.S. farmers. For the week ended May 9, 67% of the U.S. corn crop has been planted, well above the 5-year average of 52%. However, only 20% of the corn crop has emerged, which is down from 22% at this point last year. Meanwhile, only 10% of the U.S. soybean crop has emerged, this despite 42% of the U.S. soybean crop being planted.

INSIGHTS

Tale of Two Markets: The USDA confirmed this morning that China has purchased 680,000 metric tons of corn for delivery in the 2021/22 marketing year. This comes after confirmation Monday that China purchased over 1 million tons of U.S. corn in 2021/22, while canceling 280,000 tons of corn that were booked for 2020/21. The move to buy more U.S. corn for next marketing year appears to reflect the difference in price between old and new crop. "It could be a tale of two markets with old crop pulled higher by tight old crop supplies and Brazilian problems while anticipation of bigger acres and a favorable weather outlook pressure new crop," said Doug Bergman of RCM Alternatives.

Take It to the Limits: Grain futures trading on the CBOT are expected to post big moves following the release of the May WASDE report tomorrow at noon eastern time. "This is the first report we see supply and demand tables for new crop," said Craig Turner of Daniels Trading. "This report has the potential to create limit moves if we get a big bullish or bearish surprise tomorrow. The tighter the stocks the bigger the price moves during weather rallies and report surprises."

Ethanol Bumper Crop: U.S. ethanol production is projected to show a rise in the past week, according to analysts surveyed by Dow Jones. They forecast the EIA's ethanol production data, released tomorrow, to show production ending May 7 to total anywhere from 950,000 barrels per day to 976,000 barrels per day - up from 952,000 barrels per day reported last week. If production hits the high end of estimates, it'll be the highest ethanol production has been since mid-December, and well up from 617,000 barrels per day reported at this time last year.

AHEAD:

--The EIA will release its weekly ethanol production and stocks report at 10:30 a.m. ET Wednesday.

--The USDA will release its monthly supply and demand report at noon ET Wednesday.

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

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

(END) Dow Jones Newswires

May 11, 2021 15:39 ET (19:39 GMT)

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