You are here

3 Big Things Today, July 28

Wheat Futures Rise on Egypt Tender; Fed Leaves Key Interest Rate Unchanged.

1. Wheat Futures Rise Overnight as Egypt Issues Tender

Wheat futures rose overnight after Egypt, the world’s biggest importer of the grain, issued a tender to purchase grain from the U.S. or Canada, as well as other countries.

Egypt’s General Authority for Supply Commodities (GASC) said yesterday it’s seeking cargoes of U.S. soft white wheat from the Pacific Northwest, U.S. soft red winter wheat or Canadian soft wheat. It also is seeking cargoes of milling wheat from one or several European countries, Russia, and the UK.

The tender listed several names, an unusual move by GASC, which usually says it’s seeking wheat from global suppliers. Egypt said it wants to buy 55,000 to 60,000 metric tons of the grain, though that’s generally a simple guideline and amounts tend to be much higher than that.

Wheat futures for September delivery rose 4¾¢ to $4.19½ a bushel on the Chicago Board of Trade, while Kansas City wheat added 4½¢ to $4.17 a bushel.

Corn futures rose slightly, gaining 1¼¢ to $3.44¼ a bushel.

Soybean futures for November delivery rose 1¼¢ to $9.87¼ a bushel. Soy meal futures for December delivery gained 90¢ to $344.10 a short ton, and soy oil lost 0.09¢ to 29.93¢ a pound.

**

2. Fed Expectedly Leaves Key Borrowing Rate Unchanged, Money Still Cheap

Unsurprisingly, the U.S. Federal Reserve on Wednesday left its key base rate unchanged as it has every month since December.

So what does that mean, exactly? For one, it means money is still relatively cheap. The Fed’s Federal Funds Rate tends to only affect long-term loans of more than five years, according to economists.

Loans for cars and furniture and other items that are paid off fairly quickly aren’t impacted, but certainly home loans, farm-equipment loans, and land loans would be.

The Fed this month was expected to leave the rate unchanged, so yesterday’s announcement after the Federal Open Markets Committee (FOMC) two-day meeting in Washington came as no surprise to anybody. The U.S. economy, in a vacuum, would be able to stand the rate hike, but the global economy is too uncertain right now, the FOMC said.

"Near-term risks to the economic outlook have diminished,” the Fed said in a statement after its meeting. “The committee continues to closely monitor inflation indicators and global economic and financial developments.”

Some analysts said they expect a rate hike at the Fed’s next meeting in Septembe. If that happens, the cost of borrowing for large items may go up, but only slightly. It’s likely the Fed wouldn’t be too aggressive in raising rates – maybe bumping the base rate by 25 basis points – as it doesn’t want to curtail spending.  

Get today’s news sent to your in-box by signing up for Successful Farming newsletters.

**

3. Large Storm Moving Through Southern Indiana, Ohio on Thursday

Southern Illinois, Indiana, and Ohio are all in the path of a large storm that’s now moving east slowly, according to the National Weather Service.

Thunderstorms will cause localized flooding in parts of the region, which also includes Kentucky and Middle Tennessee.

“A slow-moving weather system in the eastern U.S. will focus showers and thunderstorms from the mid-Mississippi River Valley to the mid-Atlantic on Thursday,” the NWS said. “Abundant moisture will allow occasionally heavy rainfall. Flash flood watches are in effect in these areas. Severe thunderstorms with damaging wind gusts and large hail will also be possible in this same area.”

The agency has issued flash flood watches and warnings and severe weather alerts for the region.

Get involved in the discussion in Marketing Talk.

 

Read more about

Tip of the Day

Tech Tip: Do the Research

Before you make a purchase, do some research on the piece of technology you want to buy. This helps ensure you're not overpaying but also... read more

Talk in Marketing

Most Recent Poll

How much of your 2019 corn crop is planted?