By Kirk Maltais

--Soybeans for November delivery fell 1% to $13.69 3/4 a bushel on the Chicago Board of Trade on Wednesday. Low water levels on the Mississippi River and a stronger U.S. dollar both limited demand for U.S. grains exports.

--Wheat for December delivery fell 0.1%, to $9.02 a bushel.

--Corn for December delivery rose 0.2%, to $6.84 a bushel.

HIGHLIGHTS

Low Levels: Dry weather is keeping water levels at historic lows in the Mississippi River according to media reports - causing a back-up in river barges. Meanwhile, DTN is forecasting little rainfall in the Midwest until next week. For traders uncertain about export demand prospects for U.S. grains, issues with the river are a source of price pressure. "Gulf exporters have pulled offers for corn and soybeans loading in October and November as it is unclear if they can source enough grain," Joel Karlin of Western Milling told the WSJ.

Changing Course: The steep drop in the U.S. Dollar index earlier this week appeared to have been overdone. "CBOT grain values have been sensitive to the rise and fall of the financial markets since the U.S. Central Bank raised interest rates in September," said AgResource in a note. The firm adds that it expects the heightened connection between the movement of the U.S. dollar and grain futures to continue as a stronger dollar is making U.S. exports less attractive.

INSIGHTS

Demand Prospects: Soybean export sales may rise above the 1 million metric tons mark in this week's export sales report, according to grain traders surveyed by The Wall Street Journal. They are forecasting sales to go as high as 1.2 million tons, versus 973,000 tons last week. Meanwhile, corn sales are forecast between 350,000 tons and 800,000 tons and wheat sales are seen as between 200,000 tons to 450,000 tons.

Defying Expectations: The market also reacted to StoneX estimating U.S. corn yields to actually climb in next week's monthly WASDE report from the USDA. The firm forecasts corn yield at 173.9 bushels per acre, which is up from its previous estimate and higher than the USDA's current figure of 172.5 bushels per acre. "StoneX's initial foray into October yield estimates should ease the trade's fears a bit regarding a contracted corn balance sheet post-USDA quarterly stocks," said Matt Zeller of StoneX in a note. Meanwhile, the firm lowered its expectation for soybeans to 51.3 bushels per acre - although that's still higher than the USDA's forecast of 50.5 bushels per acre last month.

Low Note: Inventories of ethanol in the U.S. are at the lowest level since December of last year, the EIA reports. The government says inventories fell to 21.69 million barrels for the week ended September 30, down from 22.69 million barrels in the previous week. The decline is well outside of analyst estimates, with those surveyed by Dow Jones forecasting stocks to be within 22.5 million barrels and 23.09 million barrels. The last time stocks declined to below the 22 million barrel mark was in the last week of December 2021 - in which inventories totaled 21.36 million barrels.

AHEAD:

-Conagra Brands Inc. will release its fiscal first-quarter earnings at 7:30 a.m. ET Thursday.

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

October 05, 2022 15:34 ET (19:34 GMT)