Wheat Higher as Inflation Lifts Grains -- Daily Grain Highlights

By Kirk Maltais

--Wheat for December delivery rose 1.8% to $7.49 1/4 a bushel, on the Chicago Board of Trade Wednesday, rising as traders increased their investments in commodities in a wave of inflation-related hedging.

--Corn for December delivery rose 1.7% to $5.39 1/4 a bushel.

--Soybeans for November delivery rose 1.4% to $12.45 1/2 a bushel.

HIGHLIGHTS

Inflation Trade: As with most commodities recently, inflation jitters are working their way into grain futures. Arlan Suderman of StoneX says grain and oilseed prices are finding additional buying support "as the inflation trade on Wall Street supports efforts of the corn and soybean market to carve out harvest lows." And the inflation trade is being closely watched by the Federal Reserve. Fed governor Christopher Waller says the central bank could move forward the timeline for raising short-term interest rates to restore price stability if high levels of inflation don't start cooling soon.

All Locked Up: Also lifting grains Wednesday are expectations of export sales strength, as well as the reluctance of U.S. farmers to sell off their freshly harvested crops. "Once the crop is locked away in the bin, it will be hard for end users to pry it out again until at least early 2022," said Tomm Pfitzenmaier of Summit Commodity Brokerage. "The U.S. is the world's cheapest supplier of feedgrains for delivery beyond October and so we continue to be somewhat optimistic that this will lead to export demand that is at least as good as the USDA is indicating."

INSIGHTS

Pandemic High: U.S. ethanol production is jumping again this week, bringing the daily production rate to its highest level since before the coronavirus pandemic. The EIA said U.S. daily ethanol production through October 15 hit a rate of 1.1 million barrels per day, up from 1.03 million barrels per day reported last week. This is more than anticipated by analysts surveyed by Dow Jones, who estimated production to be anywhere from 970,000 barrels per day to 1.06 million barrels per day. It's the biggest daily ethanol production since June 2019. Meanwhile, U.S. ethanol inventories also grew, with inventories through October 15 reported at 20.08 million barrels - the highest in three weeks.

Jumping Beans: Export sales of U.S. soybeans are expected to jump in tomorrow's report from the USDA, according to grains traders surveyed by The Wall Street Journal. They see soybean sales totaling anywhere from 1.2 million metric tons to 2.5 million tons for the week ended October 14, up from 1.15 million tons for the previous week. The USDA last reported flash sales of U.S. grains on October 15, but grain traders in general have been anticipating stronger demand for U.S. exports as futures prices relaxed in the first half of October.

AHEAD

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

--The USDA will release its monthly livestock slaughter report at 3 p.m. ET Thursday.

--The USDA will release its monthly Cattle on Feed report at 3 p.m. ET Friday.

--The USDA will release its monthly cold storage report at 3 p.m. ET Friday.

--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

October 20, 2021 15:48 ET (19:48 GMT)