3 Big Things Today, May 23
1. Wheat Declines as Progress Report Shows Unexpectedly Good Crop
Wheat futures were lower overnight amid surprisingly improving crop conditions.
The winter crop was rated 52% good or excellent as of Sunday, up from 51% a week earlier, according to the U.S. Department of Agriculture.
The hard red winter crop in Kansas, the biggest producer of the grain, was rated 47% good or excellent, and 49% of Oklahoma wheat earned top ratings, the USDA said in a report on Monday.
The hard red winter crop is doing surprisingly well considering it was buried under almost 2 feet of snow in the last week of April. So far, there’s been little news about the impact of that storm on plants. Wheat streak mosaic, a crippling viral disease, also has been widespread, according to industry group Kansas Wheat.
In the eastern Midwest where soft red winter varieties are planted, incessant rains have delayed corn and soybeans but apparently are giving wheat a boost. In Arkansas, 71% of the crop is in good or excellent condition, while in Missouri, 61% has earned top ratings.
Wheat for July delivery fell 3¼¢ to $4.31 overnight on the Chicago Board of Trade, and Kansas City futures declined 5½¢ to $4.30½ a bushel.
Soybean futures for July delivery lost a nickel to $9.51½ a bushel overnight. Soy meal fell $1.20 to $306.60 a short ton, and soy oil futures declined 0.27¢ to 32.67¢ a pound.
Corn futures fell 2½¢ to $3.72½ a bushel in overnight trading.
2. Casale Out as CEO of CHS as Company Faces Declining Profits
It seems farmers aren’t the only ones being affected by the continued low prices in agriculture commodities.
Carl Casale is out as the chief executive of the biggest U.S. ag co-op CHS Inc. amid declining income. The company said last month that earnings in the first six months of the year totaled $223.7 million, down from $235.5 million during the same time frame a year earlier.
CHS’s ag segment, which includes its global grain marketing and crop nutrients businesses, renewable fuels, local retail operations, and processing, lost $9.3 million in the second quarter of 2017, which is a vast improvement from a loss of $31.1 million the prior year.
The company also was reportedly among the largest creditors for Seara Corn, a Brazilian commodities trader that filed for bankruptcy protection. Reuters reported that CHS credits with Seara totaled about $200 million.
Jay Debertin, who’s been with CHS since 1984 and was an executive vice president for the Inver Grove Heights, Minnesota-based company, will take over for Casale, who had been with the company for seven years.
Also out is Dave Bielenberg, who “decided to step down as chairman” of the company’s board of directors, a position he’d been in since 2012. Bielenberg will still serve as a representative on the company’s board.
Taking over as chairman will be Dan Schurr.
It’s been a rough go for companies that make agricultural products. Archer Daniels Midland went through a shakeup to boost profits, and Bunge has said it’s had troubles in its global trading segment.
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3. Only a ‘Slight’ Chance of Rain Today in Much of Midwest, Precipitation Returns Tomorrow Night
There’s only a “slight” chance of thunderstorms for much of northern Illinois, northern Indiana, and Ohio today and tomorrow, a change from the past few days of incessant precipitation.
If storms do develop, they’re not expected to be severe, according to the National Weather Service.
The rains, however, are expected to return starting late Wednesday, which could cause some flooding, the NWS said in a report early Tuesday.
Flood warnings still abound in much of southern Missouri and southern Illinois along the Mississippi River and its tributaries. A stretch of the river essentially from Hannibal, Missouri, all the way to the Gulf of Mexico is under a flood warning, according to the NWS maps.
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