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3 Big Things Today, June 19

Wheat Futures Again Lower Overnight; U.S., Chinese Officials to Meet Before G-20 Next Week

1. Wheat Drops on Positive Crop Conditions

Wheat futures were again lower overnight on favorable crop conditions in the southern and northern U.S. Plains.

About 64% of the U.S. winter wheat crop was in good or excellent condition this week, up from 39% at the same point last year, the U.S. Department of Agriculture said in a report. Still, only 8% of the crop was harvested as of Sunday, down from the prior average of 20% for this time of year.

Some severe weather is expected in parts of the southern Plains, but most of southwestern Kansas will be dry for the rest of the week, the National Weather Service said.

The best chance of rain won’t be until Saturday and Sunday, according to the NWS. Until then, hard-red winter wheat producers will be able to accelerate the harvest.

Some 77% of the spring wheat crop earned top ratings, and while that’s fairly high for this time of year, it’s still down from 81% the previous week and 78% at the same time in 2018, the USDA said.

Almost 95% of spring wheat has emerged, near the average of 97%, but only 2% was headed, down from the normal 12%.

Wheat for May delivery fell 8¢ to $5.23½ a bushel overnight on the Chicago Board of Trade, while Kansas City wheat dropped 9½¢ to $4.67½ a bushel.

Corn futures for May delivery lost 3¢ to $4.46¾ a bushel overnight.

Soybeans for May delivery declined 3¾¢ to $9.09¾ a bushel overnight. Soymeal fell $1.60 to $320.40 a short ton, while soy oil gained 0.12¢ to 28.45¢ a pound.

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2. U.S., Chinese Negotiators to Hold Talks Before Presidents Meet at G-20 Meeting in Japan

U.S. and Chinese officials will conduct talks before next week’s Group of 20 meeting next week in Japan, where presidents Donald Trump and Xi Jinping will meet, Trump said in a tweet yesterday.

“Had a very good telephone conversation with President Xi of China,” Trump said in his tweet. “We will be having an extended meeting next week at the G-20 in Japan. Our respective teams will begin talks prior to our meeting.”

The U.S. last month increased tariffs on more than $200 billion worth of Chinese goods, raising the import levy from 10% to 25%. Trump has said he’ll increase tariffs on another $300 billion worth of Chinese goods if a deal isn’t reached soon, though he didn’t give a date for such a move.

China, meanwhile, has imposed increased tariffs on $60 billion worth of U.S. goods. The South China Morning Post and Politico said in a joint report that Chinese importers face a 62% levy on U.S. pork, making it too expensive for consumers in the Asian nation.

Because of that, the report said, the U.S. may be losing out on supplying China with pork as the country’s pig population has been slashed by half by African swine fever.

The ongoing trade war is also hurting not only the U.S. and Chinese economies but also the global economy.

The World Bank has cut its outlook for economic growth worldwide by 0.3 percentage points this year due to weakness in trade and manufacturing.

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3. Flash Flood Warnings in Effect For Much of Illinois, Indiana, Ohio as Showers Expected

The southern half of Illinois, Indiana, and pretty much all of Ohio are in a flash flood watch this morning, according to the National Weather Service.

The area has been pounded with rainfall for the better part of the past couple of months as more than six times the normal amount of precipitation has fallen, NWS data show. Rainfall now is just running off due to the already-soaked soil in the area.

“The ground across much of central Indiana is saturated,” the NWS said in a report early this morning. “A pair of weather systems along with a lingering frontal boundary across central Indiana are expected to bring rounds of showers and thunderstorms to central Indiana this afternoon and tonight. Should heavy rain occur … flash flooding is likely to occur.”

In Ohio, scatted showers will become “numerous” today into the overnight hours.

With the ground already saturated and rivers and streams already close to flood level, the potential for flash floods is high, the agency said.

Storms in the region could bring rainfall rates of up to 2 inches an hour, the NWS said.

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