3 Big Things Today, September 29
1. Soybean, Corn Futures Gain as Farmers Finding Wet Fields, Oil Futures Rise
Soybean and corn futures rose overnight as the harvest rolls on and farmers find wet fields and oil futures jump, boosting all commodities.
The corn harvest, which was about 15% finished as of Sunday, continues as dry weather in the Midwest allows farmers into fields. Growers have reported a wide spectrum of moisture levels ranging from 15% to 25%. One farmer said his corn was “nothing to write home about” while another said it was ideal.
Oil futures jumped 6% yesterday after the Organization of the Petroleum Exporting Countries (OPEC) said it would cap production levels to boost prices and seek cooperation from non-OPEC producers. That, in turn, gave a boost to commodities.
Soybeans for November delivery rose 8½¢ to $9.54 a bushel overnight on the Chicago Board of Trade. Soy meal futures for December delivery gained $3 to $302.40 a short ton, and soy oil added 0.13¢ to 33.02¢ a pound.
Corn futures for December delivery gained 3½¢ to $3.32¾ a bushel.
Wheat futures for December delivery gained 2½¢ to $4.05¾ a bushel in Chicago, while Kansas City futures rose 3¼¢ to $4.24½ a bushel.
2. Oil Prices Jump as OPEC Production Limits Have Desired Effect
The Organization of the Petroleum Exporting Countries (OPEC) on Wednesday said it would limit crude oil production and seek cooperation from non-OPEC countries to also curb output in a bid to raise prices.
The mere mention of an agreement by members was enough to push prices up 6% yesterday.
The group said it will limit crude output to between 32.5 million and 33 million barrels a day “in order to accelerate the ongoing drawdown of the stock overhang and bring the rebalancing forward.”
The stock overhang, as OPEC calls it, is a glut of oil that’s been weighing on prices for about the past year. Crude futures that neared $115 a barrel three years ago earlier this year fell below $30 a barrel, having a profound effect on the economies of several OPEC countries.
Members decided at their meeting in Algiers yesterday that it was time to do something, though prices have rebounded this year and, prior to the announcement, had risen to about $45 a barrel.
Users of gas, which is just about everybody in the U.S., can expect to see higher gas prices if more producing countries decide to follow OPEC’s suit and limit output.
Still, it seems the sky isn’t falling, as U.S. futures overnight were down 0.1% and Brent crude, the global standard, dropped 0.3%. It remains to be seen if, first, OPEC members abide by the limit, and second, if any other countries will join the group in limited production.
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3. Dry Weather Continues in Parts of Midwest, Allowing Harvest to Roll
Dry weather will persist through today, allowing farmers into fields, as little rain is seen in much of the Midwest.
After months of wet weather, a well-timed dry spell has made its way into the region, allowing crops to dry down and farmers to collect crops. The dry weather is expected to continue through the next six to 10 days in northern regions of the Midwest, while eastern states will probably see some rain, according to forecaster MDA Information Services.
The 11- to 15-day outlook is drier in central parts of the Midwest, MDA said.
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