By Kirk Maltais


--Wheat for September delivery rose 8.5% to $7.27 3/4 a bushel, on the Chicago Board of Trade on Wednesday, in reaction to the escalation of fighting in Ukraine and after Russia's exit from the Black Sea Grain Initiative.

--Corn for December delivery rose 3.5% to $5.53 a bushel.

--Soybeans for November delivery rose 1% to $14.08 3/4 a bushel.


HIGHLIGHTS


Flat Footed: After spending much of July gradually falling, wheat futures rallied this morning -- rising as high as 9%, or 60 cents a bushel. That 60 cents is the limit wheat futures can move in one trading session. The move came on heightened fighting in Ukraine, with Russia stepping up attacks on port cities after exiting the Black Sea Grain Initiative. It also comes as fund investors continue to hold a net short position in soft red wheat futures, according to the CFTC's last Commitment of Traders report released Friday. "They're scrambling right now," says Don Roose of US Commodities. "We're escalating the Black Sea risk."

Secondary Role: Reports of a global heat wave this week did factor into the risk calculations of grain traders today, but not as much as the Russia-Ukraine war, said Virginia McGathey of McGathey Commodities. "Short covering is at a quicker pace because of the surprise Russian strike on Odessa," she said. "Worries and uncertainty adding a premium to all grains but especially wheat."


INSIGHT


Dry Spell: Heat is expected to increase in U.S. growing areas by next week, according to a forecast this morning from DTN. The timing of the heat wave is bad, since it is coming as the corn crop progresses through its pollination and kernel-filling stages of development. It also follows as recent rains failed to quell soil moisture issues, particularly in the Midwest. "Subsoil moisture remains critical across most of the region and cannot take an extended period of heat and dryness," said DTN.

Top of the Heap: Corn exports out of Brazil remain more affordable than their U.S. counterparts, which could be a source of pressure on corn futures in the near-term. "Brazilian corn maintains a slight discount in Asia when accounting for all costs, and there's little doubt Brazil will dominate global corn trade through the summer and into autumn," Daniel Flynn of Price Futures Group said in a note.

On the High End: Production of ethanol in the U.S. jumped for the week ended July 14, exceeding analyst forecasts and finding its highest level since December. In its latest weekly report, the U.S. Energy Information Administration said that average daily ethanol production for the week was 1.07 million barrels a day, up from 1.032 million barrels a day reported last week by the EIA and well above the forecasts of analysts surveyed by Dow Jones. They had projected production to be anywhere from 1.024 million barrels a day to 1.06 million barrels a day. Ethanol stocks also rose for the week, the EIA reported.


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 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

07-19-23 1521ET