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3 Big Things Today, August 17

Beans, Corn Little Changed Overnight; Weaker Dollar Helps Boost Export Sales.

1. Soybeans, Corn Mixed Overnight as Investors Weigh Demand, Supply

Soybeans and corn were little changed overnight as investors weigh strong demand against record production for both crops.

Demand for soybeans, especially, has been strong as of late, with China stepping up purchases for the 2016-2017 marketing year.

The Department of Agriculture yesterday announced the sale of another 119,000 metric tons of soybeans to the Asian country, the world’s biggest importer of the oilseeds. The amount sold in the past two weeks has risen to about 3.6 million metric tons, according to the USDA.

That’s good news, considering the government last week forecast soybean and corn production at records. Soybean output is seen at 4.1 billion bushels and corn output was pegged at 15.2 billion bushels in a monthly report on August 12.

Soybean futures for November delivery rose 1¾¢ to $10.09 a bushel overnight on the Chicago Board of Trade. Soy meal futures for December delivery fell $1.90 to $330.40 a short ton, and soy oil gained 0.59¢ to 34.41¢ a pound.

Corn futures for December delivery fell ¼¢ to $3.37 a bushel in Chicago.

Wheat futures for September delivery lost 1½¢ to $4.22 a bushel, while Kansas City futures declined ¾¢ to $4.10½ a bushel in Chicago.

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2. Weakened Dollar Helping Boost Demand For U.S. Beans

Demand for soybeans has been extremely strong lately with the USDA announcing sale after sale of U.S. inventories.

It shouldn’t be a big surprise, as prices that are constantly flirting with the $10-a-bushel mark make supplies extremely attractive right now. It also doesn’t hurt that the value of the U.S. dollar has once again plunged, this time to the lowest level in seven weeks, boosting purchasing power for overseas buyers looking to lock in supplies.

The greenback yesterday declined to its lowest value against a basket of competing currencies since late June. That makes dollar-denominated products, including agricultural goods, less expensive to foreign buyers.

Yesterday’s announcement by two members of the Federal Reserve, who indicated an interest rate hike may be on the table as early as September, gave the dollar a small bump, but it’s only up 0.2% this morning – certainly not what most would call a comeback.

It will be interesting to see how fluctuations in the dollar affect demand, but hopefully the low prices and weak greenback can continue to bring in buyers and draw down the massive crop that’s getting a step closer to harvest every day.

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3. Rain Expected Through at Least Thursday as Storm Stalls

The storm that’s stalled over the central U.S. will stay put at least through Thursday night, dumping rain in areas where flash floods have become a problem.

Stretching from south-central Texas well into Ohio, the storm has caused severe flooding in several states. In Louisiana, 11 people have died and another 40,000 are reportedly homeless after the torrential downpours caused floodwaters to rise, according to media reports. 

Flash flood warnings have been in effect for the better part of the past two days in parts of the Corn Belt including Missouri, Arkansas, and Illinois. Parts of the Gulf Coast also may get more rain.

“An axis of tropical moisture … will aid in producing showers and thunderstorms over parts of the Southern Plains into parts of the Ohio Valley through Thursday evening,” the National Weather Service said in a report on Wednesday. “In addition, daytime heating and moisture-rich air extending from the Mid-Atlantic southward to the Central Gulf Coast and the southeast will aid in producing showers and thunderstorms over the region during the afternoon into late-evening hours on Wednesday and Thursday.”

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