3 Big Things Today, April 14, 2021
1. Wheat Futures Rise Overnight on Dry Weather
Wheat futures were higher in overnight trading on concerns about dry weather globally.
Little or no rain has fallen in the past two weeks in parts of the southern Plains, according to the National Weather Service, where hard-red winter wheat is emerging from winter dormancy.
So far in Kansas, the biggest U.S. producer of wheat, there’s a sliver of severe drought in western counties, but areas of moderate drought and abnormal dryness are prevalent in the western quarter of the state, according to the U.S. Drought Monitor.
Still, some rain is on the way this week, said Donald Keeney, an agricultural meteorologist with forecaster Maxar.
“Rains in southeastern areas (of the Plains) will improve soil moisture for wheat but cool temperatures will maintain slow growth,” he said in a weather report.
As of Sunday, 53% of the U.S. winter wheat crop was rated good or excellent, unchanged from the previous week, according to the Department of Agriculture. That’s down from 62% during the same week last year.
In Kansas, 55% of the hard-red crop earned top ratings, up 1 percentage point from the prior week, the USDA said.
In Europe, soil moisture is expected to decline in France, Germany, Italy and the UK, Keeney said. In Canada, snowfall will improve soil moisture in eastern provinces but dry weather is expected to continue in parts of Saskatchewan and Alberta, he said.
Soybean futures were higher overnight on signs of demand for U.S. supplies. Exporters reported sales of 132,000 metric tons of U.S. beans to China for delivery in the current marketing year and 110,000 tons to Bangladesh for delivery partly in 2020-2021 and 2021-2022, the USDA said.
Dry weather in U.S. growing areas also is a concern as half the normal amount of rain has fallen in the past week in much of Iowa, the biggest producer of both soybeans and corn, NWS maps show.
Wheat futures for May delivery gained 9½¢ to $6.39¼ a bushel overnight on the Chicago Board of Trade, while Kansas City futures added 8¾¢ to $5.93½ a bushel.
Soybean futures for May delivery rose 11¼¢ to $14.00¾ a bushel. Soymeal jumped $2.90 to $397.90 a short ton, and soy oil added 0.34¢ to 53.37¢ a pound.
Corn futures for May delivery rose 7½¢ to $5.87½ a bushel.
2. Chinese Soybean Imports Jump in March After Weak February
Chinese soybean imports surged in March after lackluster purchases the previous month due to the global pandemic, according to customs data from the world’s largest importer of the oilseeds.
Imports jumped to 7.77 million metric tons last month, up 40% from February and 80% from the March 2020, the data show.
“What is more, March saw delayed shipments from Brazil unloaded, which explains the sharp rise vis-a-vis the comparatively weak previous month,” Commerzbank’s Carsten Fritsch said in a note to clients. “Even if these special factors are taken into account, however, the data nonetheless paint a picture of continued highly dynamic soybean demand in China.”
The Asian nation is expected to import 100 million metric tons of soybeans in the 2020-2021 marketing year, the U.S. Department of Agriculture said in a report last week.
If realized, that would be up from 98.5 million tons last year and just 82.5 million tons two years prior, the USDA said.
Brazil production, however, is expected to climb to 136 million metric tons this marketing year, the agency said in its report. That would be up from the 128.5 million tons produced the previous year.
Exports from the South American country are now pegged at 86 million metric tons, the USDA said. That forecast is up from a previous outlook for 85 million metric tons.
In the U.S., the world’s second-biggest shipper of soybeans, inventories are projected to drop to 3.25 million metric tons from 14.3 million tons the previous year, government data show. That would drive the stocks-to-use ratio to a record-low 2.6%, Fritsch said.
“This makes the soybean price susceptible to price spikes if problems are experienced during planting – which is due to begin soon – and the subsequent growing phase,” he said in his report.
3. Freeze Warnings in Effect in Parts of Eastern Nebraska and Western Iowa
Freeze warnings are in effect until 8 a.m. local time Wednesday in parts of eastern Nebraska and southwestern Iowa, according to the National Weather Service.
Temperatures overnight were forecast to fall as low as 30°F., the NWS said.
Frost advisories also are in effect from western Iowa into Illinois and in several counties in northern Missouri, weather maps show.
Farther north and west, a winter weather advisory has been issued for much of eastern Wyoming into southwestern South Dakota.
Snowfall from 3 to 6 inches is expected in the region starting tomorrow and lasting into Friday morning, the NWS said.
“A storm system will bring a prolonged period of mostly light snowfall to much of northeast Wyoming and southwest South Dakota, starting late tonight over northeast Wyoming and early Thursday over the Black Hills and far southwest South Dakota,” the agency said.
In the southern Plains, meanwhile, thunderstorms are possible today and tonight in southwestern Kansas and the Oklahoma and Texas panhandles.
“Thunderstorm chances return mainly to western north Texas and the southern half of Oklahoma this afternoon and evening,” the NWS said in a report early this morning. “A few strong storms with hail up to the size of nickels are possible with this activity, especially across western north Texas.”