By Kirk Maltais

-- Corn for December delivery rose 2.4% to $5.39 1/2 a bushel on the Chicago Board of Trade Monday, with grain traders anticipating that a deal that exchanged a Huawei executive for two Canadian prisoners in China may be followed with a large purchase of U.S. corn.

-- Soybeans for November delivery rose 0.2% to $12.87 1/2 a bushel.

-- Wheat for December delivery fell 0.2% to $7.22 1/4 a bushel.

HIGHLIGHTS

Let's Make a Deal: Corn futures were lifted Monday in reaction to a diplomatic deal over the weekend that allowed Huawei executive Meng Wanzhou to return to China after being detained in Canada on behalf of the U.S. for nearly three years.

"The U.S. action is seen as a lessening of tensions, and the rumors today were that it would soon be followed by some kind of Chinese announcement of a major corn purchase," said Charlie Sernatinger of ED&F Man Capital.

No such purchase of corn was announced by the USDA Monday.

Opportunity Knocks: The USDA reported a new flash sale of soybeans to China Monday morning, with 334,000 metric tons of soybeans sold for delivery in the 2021-22 marketing year.

It is the first flash sale of soybeans to China in over a week, and comes as traders wait for indications about weather as Brazilian farmers plant their new crop. A power shortage in China has put a crimp on soybean processing.

Treading Lightly: This week's quarterly stocks report from the USDA, due for release Thursday, has grain traders making limited moves to begin the week, with only corn closing substantially higher Monday.

"Traders will become increasingly cautious ahead of the Sept. 30 report on quarterly stocks," said AgriTel.

Meanwhile, Friday's CFTC commitments of traders report showed that fund traders posted limited selling of long positions in grains for the week ended Sept. 21, although they are still net long in grains as a whole.

INSIGHTS

Looking for a Dip: The USDA is expected to report drops in grain stocks, according to analysts surveyed by The Wall Street Journal this week. They predict stockpiles of corn at roughly 1.17 billion bushels, stockpiles of soybeans at 172 million bushels, and stockpiles of wheat at 1.86 billion bushels.

All three estimates would be down from the agency's previous view.

"These will be as of Sept. 1st and give a clear indication of old- crop ending stocks on corn and soybeans," said Karl Setzer of AgriVisor. "What would catch [the] trade by surprise would be inventories on the high side as they would indicate last year's crops may have been underestimated."

Progress Pushes On: Warm weather in the Midwest is helping farmers get into fields to harvest crops.

"The Midwest will be dry with high temps ranging from the 70's to the upper 80's," said AgResource. "The summerlike warmth and the dry weather will maintain a fast harvest pace." The firm adds that some rainfall is expected to hit the eastern Midwest this weekend, which may cause some slowdown in harvesting.

The USDA's latest crop progress report Monday afternoon will give traders a better idea of how much progress farmers have made thus far.

On the Upswing: After being down in recent weeks because of port closures on the Gulf, grain export inspections are making a comeback, according to data from the USDA. In its latest weekly grain export inspections report, the USDA said that inspections of U.S. corn totaled 517,539 metric tons, up from 403,422 tons the week prior.

Soybean inspections, meanwhile, totaled 440,742 tons, up from 277,297 tons last week.

Nearly half of this week's soybean figure was destined for China, with other leading countries being Japan and Mexico.

AHEAD

-- The EIA is scheduled to release its weekly ethanol production and stocks report at 10:30 a.m. EDT Wednesday.

-- The USDA is due to release its weekly export sales report at 8:30 a.m. EDT Thursday.

-- The USDA is scheduled to release its quarterly grains stocks report at noon EDT Thursday.

-- The USDA is due to release its monthly agricultural prices report at 3 p.m. EDT Thursday.

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

(END) Dow Jones Newswires

September 27, 2021 15:49 ET (19:49 GMT)