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3 Big Things Today, April 29, 2020

Grains, Beans Little Changed Overnight; USDA to Work With Meatpackers to Ensure Safety.

1. Grains and Soybeans Little Change in Overnight Trading

Grains and soybeans were little changed in overnight trading as investors weigh a potential increase in demand as meatpacking facilities were ordered by President Donald Trump to remain open against ongoing concerns about overseas purchases.

The order from the president likely will mean increased demand from beef, pork, and poultry processors and an uptick in feed purchases. Several facilities had shut in recent weeks as employees fell ill from COVID-19.

On the other hand, demand for U.S. corn, wheat, and soybeans from overseas buyers remains elusive as the disease continues to spread.

Demand for corn from ethanol plants has plunged as people stay home and drive less. Production of the biofuel dropped to a record low in the week through April 17 due the reduced use of gasoline in the U.S.

Helping underpin prices, however, were reports that farmers in Argentina have suspended their corn and soybean harvests due to excessive rainfall in growing regions.

Corn futures for May delivery rose ¼¢ to $3.12¼ a bushel overnight on the Chicago Board of Trade.

Soybean futures rose 1¢ to $8.33 a bushel overnight, while soymeal fell 10¢ to $288.30 a short ton, and soy oil added 0.06¢ to 25.83¢ a pound. 

Wheat futures for May delivery dropped 5½¢ to $5.20½ a bushel, and Kansas City futures fell ¼¢ to $4.83½ a bushel.

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2. USDA to Work With Meatpacking Plants to Ensure They Follow CDC, OSHA Guidance

The USDA will work with meatpacking plants that were ordered to stay open yesterday to ensure they adhere to guidance from the Centers for Disease Control and Prevention (CDC) and Occupational Safety and Health Administration (OSHA) on worker safety, according to a statement late Tuesday.

The USDA said the CDC, a division of the Department of Health and Human Services, and OSHA, part of the Department of Labor, have issued rules for plants that are now required to stay open even as hundreds of employees have confirmed cases of COVID-19.

Several plants, including a Smithfield processing facility in Sioux Falls, South Dakota, which employs about 3,700 people and represents 4% to 5% of U.S. pork production, and a Tyson facility in Waterloo, Iowa, where 2,800 workers are employed, have halted operations as employees fell ill from the disease.

Tyson said in its statement last week that the Waterloo facility would close after running at reduced levels due to “worker absenteeism.”

Workers at a separate Smithfield plant in Milan, Missouri, filed a federal lawsuit last week saying the company failed to provide workers with sufficient protective equipment and forced them to work in close proximity to each other, exposing them to the virus.

More than 981,000 cases of COVID-19 have been confirmed in the U.S., and the death toll from the disease now stands at 55,258, the CDC said late Tuesday. That’s an increase of 23,371 cases and 1,336 deaths from a day earlier.

Trump cited his authority under the Defense Production Act, saying meat processors must continue to operate to ensure supplies of beef, pork, and poultry. He also hinted that the plan would limit company liability against lawsuits by workers.

In its statement, the USDA said it will work with the plants to ensure they’re in accordance with CDC and OSHA rules and state and local officials to ensure the plants remain open.  

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3. Heavy Rain Forecast in Parts of Southern Wisconsin While Winds a Problem Elsewhere

Heavy rain is expected in parts of southern Wisconsin and northern Illinois this morning, which could cause rivers to overrun their banks, according to the National Weather Service.

An inch to 2 inches of rain are expected today, which could lead to minor flooding along some rivers in the region, the NWS said in a report early this morning.

Strong winds also will develop with gusts of 35 to 40 mph and some as strong as 45 mph expected.

Winds also will be strong in eastern and central Iowa where a wind advisory is in effect. Sustained winds of 20 to 30 mph along with gusts of up to 45 mph are forecast.

Farther west, a red-flag warning is in effect for dozens of counties in central Nebraska into western Kansas this morning.

Winds in western Kansas are expected to be sustained from 20 to 30 mph along with gusts of up to 40 mph. The wind, combined with relative humidity as low as 12%, will create tinderbox-like conditions that could cause fires to burn out of control, the NWS said.

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