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3 Big Things Today, September 14

Corn, Soybeans Higher Overnight; Weaker Dollar Not Translating to Higher Prices.

1. Corn Higher Overnight on Reports That Early Yields Disappointing

Corn was higher in overnight trading on reports that early yields have been disappointing.

The harvest is just under way with only 5% complete as of Sunday, according to the USDA. Still, much of the Texas crop has been collected, and harvest is moving north.

So far, according to analysts, the yields haven’t been what was expected. The USDA earlier this week pegged corn and soybean yields higher than expected, but admitted that damage from Hurricanes Harvey and Irma hadn’t been taken into account.

Even without the adjustments the agency plans to make, growers, analysts, and traders were all skeptical of the government’s numbers.

Corn for December delivery rose 2½¢ to $3.54 a bushel overnight on the Chicago Board of Trade.

Soybean futures for November delivery gained 6¼¢ to $9.66¾ a bushel overnight.

Wheat for December delivery rose 3¾¢ to $4.47 a bushel in Chicago, while Kansas City futures added 3¼¢ to $4.47½ a bushel.

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2. Weakness in Dollar Isn’t Translating Into Higher Grain Prices

We need to talk about the dollar.

The greenback is down 0.2% this morning, and while that doesn’t seem like a huge loss, it portends a potential slide back to the lowest levels since January 2015 that were reached last week.

Now, the decline in the greenback normally would mean higher prices for corn, beans, wheat, and essentially all products that are traded in dollars, as it tends to, at least in theory, boost demand.

The dollar has been weak for quite a while now due to geopolitical concerns including problems with North Korea and, of course, animosity between the U.S. and Russia. It’s also weakened as the euro has strengthened, which makes sense – when they go up, we go down.

Generally, when the dollar value declines, that boosts demand or even perceived demand for U.S. goods, including agricultural products because it gives overseas buyers more purchasing power. That doesn’t seem to be happening this time.

Scott Shellady said in a video on Agriculture.com this week that the greenback is “significantly” weaker but commodities are also weaker, an unusual situation. Every central bank is trying to weaken its currency, and the U.S. is no exception. He said he’d like to see some boost in commodities prices.

Unfortunately, thus far, the U.S. isn’t seeing that bump in demand it normally does from a weaker dollar. The USDA this week said corn exports likely will fall year over year but that soybean exports would increase.

It’ll be interesting to see if overseas buyers – and investors, in general – begin to react to the weakness in the dollar

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3. Northern Plains Likely to See Rain Today, Illinois, Indiana Due For Storms

Thunderstorms are in store for the Northern Plains today, though the weather isn’t expected to be severe.

Isolated and scattered thunderstorms are possible this afternoon and evening in much of western South Dakota and parts of Wyoming, according to the National Weather Service.

The chances of storms will return to much of South Dakota Thursday night through Saturday, the NWS said in a report early Thursday.

Farther east, some storms are possible late Saturday night and Sunday in much of Illinois. The storms that may bring precipitation to the area is slow moving and will take awhile to get across the state.

A cold front is expected to approach central Indiana this weekend, which also may mean showers and thunderstorms, though severe weather isn’t expected, the NWS said.

 

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