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3 Big Things Today, April 17

Grains, Beans Higher Overnight; Trade Talks Continue With U.S. Pushing For More Ag Access.

1. Grains, Beans Higher Overnight on Bargain Hunting

Grains and soybeans were higher in overnight trading as bargain hunters seek supplies after yesterday’s sell-off.

Corn lost almost 4¢, wheat dropped about 15¢, and soybeans declined more than a dime yesterday on the Chicago Board of Trade, bringing some buyers off the sidelines, according to analysts.

The decline on Tuesday was mostly technical in nature, but adverse weather in much of the Midwest has kept farmers out of fields.

Three percent of the U.S. corn crop was in the ground as of Sunday, down from the prior five-year average of 5% for this time of year. Only 2% of spring wheat was planted, well behind the average of 13%, the USDA said.

That’s giving some buyers a reason to be bullish.

Still, the winter wheat crop, however, was 60% good or excellent, almost double last year’s tally for this time of year, according to the government, which could keep a lid on price gains.

Corn futures for May delivery were up ½¢ to $3.59½ a bushel overnight on the Chicago Board of Trade.

Wheat futures for May delivery rose 3¼¢ to $4.48¼ a bushel, while Kansas City wheat added 4¢ to $4.26½ a bushel.

Soybeans for May delivery gained 1¾¢ to $8.89¾ a bushel. Soy meal rose 40¢ to $306.90 a short ton, and soy oil added 0.15¢ to 28.87¢ a pound.

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2. Trade Talks Drone on as China Pushes Back on Allowing Ractomine

The seemingly never-ending trade talks between the U.S. and China continued this week, with Washington continually seeking improved access into the Asian nation for agricultural products.

The U.S. has asked Beijing to lift its ban on the growth drug ractomine used by hog and poultry producers, Reuters reported, citing two people familiar with the situation.

While China has been seemingly agreeable during the talks, or at the very least amenable to some suggestions from the U.S., the government is pushing back against allowing ractomine, the report said.

Still, pork demand isn’t going away, and Chinese hog production is being devastated by African swine fever that could cull its herd by up to 200 million. That may make negotiations a bit easier as the Asian country will need to import pork in the absence of domestically grown meat.

While African swine fever is bad news for Chinese agriculture, it not only could give hog prices a boost in the U.S. but also could help corn futures.

Todd Hubbs, with the Department of Agricultural and Consumer Economics at the University of Illinois, said in a report this week that the bearish information out of the recent Department of Agriculture reports has left the corn market looking for positive news.

“A significant switch away from corn acres or a production shortfall seems necessary to move corn prices higher,” he said in his report this week. “Corn prices look to remain subdued and range-bound over the near term.”

The USDA’s World’s Agricultural Supply and Demand Estimates Report last week showed ending stocks of corn may rise year over year to 2.035 billion bushels. Livestock producers are set to use 5.5 billion bushels as feed.

A bump in demand for pork in China, however, certainly would mean increased hog production in the U.S., which, in turn, could lead to more of the grain used as feed.  

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3. Strong Storms May Bring Hail, 70 mph Winds to Southern Plains

Strong storms are possible in parts of the Southern Plains starting today that includes hail and high-wind speeds, according to the National Weather Service.

In parts of southwestern Kansas, severe storms are likely that could bring hail that’s 2 inches or more in diameter and wind gusts up to 70 mph, the NWS said in a report early this morning.

“An isolated tornado and heavy rain will all be possible,” the agency said.

Flooding continues along major waterways in the central U.S., as well. The Red River along the North Dakota-Minnesota border is over its banks in some places and nearing flood stage in others.

More rain is on the way.

“The last of the snowmelt runoff continues to make its way into the river system,” the NWS said. “Rain moving into the region tonight and tomorrow will bring an additional ¼ to ½ inch of precipitation. The lingering snowmelt and additional rainfall will bring a secondary rise or stall the decline of area rivers this week.”

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