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3 Big Things Today, April 12

Soybean Futures Rise in Overnight Trading; WASDE Shows U.S. Stockpiles Miss Estimates.

1. Soybeans Rise Overnight as Bargain Hunters Capitalize on Year Low

Soybeans rose overnight as bargain hunters again jump in to take advantage of low prices.

Futures yesterday fell to the lowest level in a year after the U.S. Department of Agriculture raised its forecast for Brazilian production beyond expectations. The USDA in its World Agricultural Supply and Demand Estimates (WASDE) Report said the South American country would produce 111 million metric tons of soybeans, topping forecasts for 110 million.

The agency is the latest group to raise its estimate, joining private analysts globally and Brazilian consultancies who’ve pegged production at a record.

Investors are beginning to focus on this year’s domestic planting as the Weekly Progress Reports are now coming out. As of Sunday, about 3% of U.S. corn was seeded, down from the prior average of 4% for this time of year.

Soybean futures rose 5¾¢ to $9.45 a bushel overnight on the Chicago Board of Trade. Soy meal was up $2.70 to $312 a short ton, and soy oil gained 0.03¢ to 31.10¢ a pound.

Corn futures added ½¢ to $3.67 a bushel in Chicago.

Wheat futures for May delivery rose a tick to $4.33½ a bushel, while Kansas City wheat lost ½¢ to $4.30¼ a bushel.

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2. U.S. Corn, Bean Stockpiles Miss Expectations, May Help Underpin Markets

The USDA’s domestic stockpiles forecasts weren’t near as bearish as expected, which may be offering some support after the monster Brazil numbers in yesterday’s WASDE Report.

The USDA pegged soybean inventories at the end of the marketing year on August 31 at 445 million bushels, up from 435 million a month earlier but down from expectations of 447 million bushels.

Similarly, corn carryout at the end of the 2016-2017 marketing year was forecast by the government at 2.32 billion bushels is up from 1.74 billion last year, but missed analyst projections of 2.35 billion.

All wheat stockpiles were the only ones to exceed consensus, with the USDA seeing inventories at the end the marketing year on May 31 at 1.16 billion bushels vs. forecasts for 1.15 billion and last year’s 1.13 billion.  

While the U.S. stockpiles figures may be helping the markets, Brazil’s monster crops certainly aren’t. The USDA said the country’s farmers will collect 111 million metric tons of soybeans this year, easily a record and beating analysts’ forecasts for 110 million.

The USDA also raised its outlook for Brazilian corn output to a whopping 93.5 million metric tons, up from 91.5 million a year earlier.

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3. Flood Warnings Issued Along Small Rivers in Illinois, Indiana, Michigan For Wednesday

Flood warnings have been issued for several rivers and tributaries in Illinois, Michigan, and Indiana this morning due to incessant rains in some areas.

Flooding is expected on parts of the Illinois, Des Plaines, and Fox rivers in Illinois today, and the Elkhart and St. Joseph rivers in Indiana, the National Weather Service said in a report early Wednesday. The Grand, Looking Glass, and Maple rivers all are expected to reach flood stages in Michigain.

More rain is expected in parts of northern Illinois this evening, which could worsen flood situations, according to the agency.

“Scattered thunderstorms are expected to develop over portions of northern Illinois,” the NWS said. “While no severe weather is expected, these thunderstorms may produce rainfall amounts of up to an inch by Thursday morning, which could produce minor localized ponding of water in low-lying areas and may result in new rises on area rivers and creeks.”

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