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3 Big Things Today, August 21

Soybeans, Corn Slightly Higher Overnight; Trade War Rages on as Sides Negotiate by Phone.

1. Soybeans, Corn Slightly Higher on Crop Tour Results

Soybeans and corn were modestly higher in overnight trading as findings from an annual crop tour rolling through the Midwest indicate worse-than-expected crops.

In Indiana, those on the Pro Farmer Crop Tour said they expected yields of about 161.5 bushels an acre, which follows the Ohio outlook for about 154.4 bushels an acre. Those are down from the USDA forecasts for 166 and 160 bushels an acre, respectively.

Soybean pod counts in Indiana were reported at 923.94 per 3×3-foot square. In Ohio, counts were reported at 764.01 pods.

Reports coming from the fields indicated that progress was behind due to late planting and that the soybean crop was of concern in the eastern Midwest so far.

Nebraska corn yields, meanwhile, were pegged at about 172.5 bushels an acre, which is still down from the USDA projection for 186 bushels an acre. Pod counts were seen at about 1,211 per 3×3-foot square, Pro Farmer said.

Soybean futures for November delivery rose 4¾¢ to $8.73 a bushel overnight on the Chicago Board of Trade. Soy meal gained $1.50 to $301 a short ton, while soybean oil added 0.18¢ to 28.97¢ a pound.

Corn futures for December delivery gained ¾¢ to $3.69½ a bushel.

Wheat for September delivery fell 3¾¢ to $4.62¾ a bushel, while Kansas City futures lost 2¾¢ to $3.99¼ a bushel.

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2. Trade War Continues as Sides Negotiate by Phone, Trump Admits Short-Term Recession Possible

Not much news has emerged in terms of actual movement in the trade war between the U.S. and China, but there’s been a lot of talk in recent days.

Negotiators have been talking on the phone recently, and White House Economic Director Larry Kudlow said at the start of this week that talks have been “positive.” More phone calls and teleconferences are expected in coming days, and if those are successful, then in-person negotiations may be scheduled, he said.

President Donald Trump, meanwhile, admitted that the spat between the world’s two largest economies could push the U.S. into a short-term recession, but taking on China was something he felt he had to do.

It’s “irrelevant” if the U.S. economy falls into a recession, because confronting China had to be done, he said. This is an about-face from earlier comments indicating that the trade war isn’t hurting the U.S. economy.

Still, a recession isn’t likely anytime soon, he said. Trump blamed the U.S. Federal Reserve, which lowered interest rates at its last meeting for the first time in more than a decade, for not lowering its federal funds rate by more and at a speedier pace.

He also acknowledged he’s considering a cut in payroll taxes to boost the economy. When talking to reporters Tuesday, he downplayed the notion that the potential tax cuts were due to a softening economy, saying he is “looking at that all the time anyway.”

The chief executive of Bunge, the world’s biggest oilseed processor, told the Financial Times in an interview published Tuesday that the company has slowed spending due to the trade war. The company plans to spend about $550 million this year, well below the $1 billion it spent on a yearly basis earlier this decade.

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3. Flash Flooding, Severe Thunderstorm Warnings in Effect in Nebraska, Storms Forecast in Iowa            

Flash flood and severe thunderstorm warnings are in effect for parts of central and eastern Nebraska this morning as storms roll through the region.

Damage from strong thunderstorms is expected in several counties in the state with “considerable” damage to trees, mobile homes, and outbuildings expected, according to the National Weather Service.

“Torrential rainfall is occurring with these storms and may lead to flash flooding,” the NWS said in a report early this morning. Wind gusts have been blowing at about 70 mph.

Several other counties in the state are under a severe thunderstorm watch.

In Iowa and northern Illinois, meanwhile, showers remain possible south of Interstate 80, the agency said. Severe thunderstorms that will be isolated are possible this afternoon in parts of extreme northeastern Missouri and adjacent areas in Illinois, the NWS said.

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