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3 Big Things Today, February 18, 2020
1. Wheat Jumps Overnight on Australian Production Woes
Wheat surged in overnight trading after the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) said production in the country would fall to a 12-year low.
ABARES said it now forecasts production of about 15.2 million metric tons, the lowest since 2008. The USDA last week pegged output at 15.6 million tons.
Wheat futures for March delivery jumped 12¢ to $5.54¾ a bushel overnight on the Chicago Board of Trade, while Kansas City futures surged 9½¢ to $4.75 a bushel.
Soybeans and corn rose overnight after markets were closed Monday in observance of President’s Day in the U.S. as the coronavirus’s rate of growth slowed in much of China.
In mainland China, more than 72,000 cases have been confirmed and almost 1,900 people have died, according to health officials. The director of a hospital in Wuhan, the epicenter of the virus, has died from the disease, also known as COVID-19.
The rate of growth in the number of cases, however, has slowed.
Fourteen Americans who were evacuated from a cruise ship that had been quarantined in the bay off Yokohama, Japan, were confirmed to have the coronavirus. More than 300 U.S. citizens from the ship were flown back to the U.S. where they’ll be quarantined at Air Force bases in California and Texas.
Outside of China, 794 cases had been confirmed as of Monday in 25 countries, according to the World Health Organization. Three people have died, WHO said in a report.
Prices also rose in overnight trading on concerns that a truckers’ strike in Brazil will slow exports from the South American country.
Soybean futures for March delivery rose 3¢ to $8.96¾ a bushel overnight on the Chicago Board of Trade. Soy meal added $1.50 to $298.10 a short ton, and soy oil gained 0.04¢ to 30.61¢ a pound.
Corn futures rose 3½¢ to $3.81¼ a bushel overnight.
2. Brazil Truckers Protest Likely to Underpin Markets Despite No Reported Disruptions
Brazilian truckers began protesting early Monday in Santos, the largest port in the South American country, in a move that underpinned soybean prices.
The truck drivers were protesting a state tax on gas and diesel, according to various media reports. About two weeks ago, the government proposed a bill that would in effect lower prices at the pump.
President Jair Bolsonaro said in a tweet on February 2 that gas and diesel prices haven’t come down despite falling at refineries because of a 30% state tax that’s adjusted only once every two weeks. That harms consumers, he said.
While there have been no reports of delays to shipments of goods including soybeans from Santos, the market is cautious as Brazil is now the world’s largest exporter of the oilseeds.
Brazil is expected to export 77 million metric tons of soybeans in the 2019-2020 marketing year, according to the USDA.
That’s roughly half the global total of exports and far outpaces U.S. shipments that are pegged at about 50 million metric tons.
In other news, the January NOPA crush report will be released today.
Analysts are expecting crush at 173.8 million bushels, down from 174.8 million last month and 171.6 million during the same month last year, while oil stockpiles are forecast at 1.782 billion pounds, up 25 million pounds from December and 1.549 billion pounds in January 2019, according to research Allendale.
3. Snow Accumulations of 5 Inches Expected in Parts of Central Nebraska Tonight
Weather maps are relatively quiet in terms of watches and warnings this morning, though there’s a winter weather advisory for several counties in central Nebraska.
Accumulations of up to 5 inches of snow are expected in the region starting tonight and lasting for about 24 hours, according to the National Weather Service.
Road conditions are expected to be slippery in the affected region.
“The threat for accumulating snow will accompany the arrival of an Arctic airmass moving into the region beginning early Wednesday morning and lasting through the day,” the NWS said in a report early this morning. “Travel impacts from slick roads are likely for the morning and evening drives on Wednesday.”
Farther east in southern Wisconsin, temperatures will begin to fall below freezing this morning and remain cold throughout much of the day. Windchills starting tomorrow are forecast to drop as low as -20˚F.