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3 Big Things Today, July 20

Corn, Beans Mixed in Quiet Overnight Trading; CWG Says Dry Weather Too Late to Damage Crops.

1. Grains, Beans Little Changed in Rare Quiet Overnight Session

Grain and soybean futures were little changed overnight, as investors weigh favorable weather against technically low prices.

As much as six times the normal amount of rain has fallen in much of the Midwest in the past two weeks, improving prospects for corn and beans. Wheat futures, though up overnight, have been pressured, as the U.S. winter harvest wraps up with farmers finding some of the biggest yields they’ve ever had.

Still, subsoil moisture, though at lofty levels, declined week over week due to extremely hot weather, and some investors are finding technical resistance as prices decline. Analysts have noted that prices may have fallen too far, though fundamentals suggest there’s more room to the downside, they said.

Corn futures for December delivery rose 1¢ to $3.49½ a bushel overnight on the Chicago Board of Trade.

Soybean futures for November delivery fell 2¢ to $10.25¾ a bushel. Soy meal futures for December delivery declined $1.70 to $354.10 a short ton, and soy oil rose 0.21¢ to 31.39¢ a pound.

Wheat futures for September delivery rose 1¢ to $4.19 a bushel in Chicago, while Kansas City wheat gained 2¢ to $4.12½ a bushel.

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2. Crops Likely to Finish Above Trend as August Dry Weather Too Late to do Much Damage, CWG Says

Corn and soybeans likely will finish at or above trend yields this year, as hot, dry weather that has been expected for some time will arrive too late to do as much damage as some forecasters had previously expected, Commodity Weather Group said in its seasonal agriculture outlook.

“The lack of a more definitively dry pattern across a larger extent of the Midwest is likely to lessen yield impacts, leaving the chance for both corn and soy to finish at or slightly above trend nationally,” CWG said in the report. “Patchy August dryness may linger in parts of the Deep South but will be too disorganized for notable impact.”

A La Niña weather pattern will develop as will warmer North Pacific and tropical Atlantic temperatures, but the forecasters said there’s recent support in the 16- to 30-day outlook for “wetter Midwest trends in the first half of August.”

Hot weather is, however, expected in the northeastern third of the Midwest, while the southern Midwest and northern Delta regions, where collection of grains and beans could be slowed, will be wetter than normal next month, the forecaster said.

“Harvest delays could occur in the southern Midwest,” CWG said. “Potential harvest delays may occur in the Delta, southern Midwest, Canada, and Mexico during September, but only Mexico remains wet in October. The tropics will need to be watched given expectation for above-normal tropical storm activity. There are low Midwest frost concerns given the fairly rapid pace of crop development, and a lack of notable fall dryness limits concerns for newly seeded winter wheat.”

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3. Extreme Heat Forecast in Midwest; Rains Expected in Iowa, Illinois

Extremely hot weather is forecast for much of the Midwest today, with heat advisories stretching from northern Minnesota south into Louisiana, according to the National Weather Service.

An excessive heat warning shows heat indexes will easily top 100˚F. for the rest of the week. Temperatures will be even hotter in the south, reaching almost 110˚F., the NWS said in a report on Wednesday.

Still, precipitation in parts of the Corn Belt will help mitigate the extremely hot weather.

“Scattered thunderstorms are expected today” in parts of northern and central Illinois and eastern Iowa, the agency said. “Some storms could be strong with gusty winds and heavy rainfall. Excessive heat warnings are in effect through Saturday. Thunderstorms are also possible Thursday night and again on Friday.”

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