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3 Big Things Today, April 5, 2022

Wheat Futures Jump Overnight; Weekly Soybean Export Inspections Rise.

1. Wheat Futures Surge in Overnight Trading

Wheat futures jumped in overnight trading after the Department of Agriculture’s first crop progress report of the year showed worse-than-expected conditions in U.S. growing areas.

The winter-wheat crop was 30% good or excellent as of Sunday, historically low for this time of the year, the USDA said in its report.

That’s down from 53% at this time last year, government data show. Analysts polled by Reuters were expecting 40% of the crop to earn top ratings.

In Kansas, the biggest producer of wheat in the U.S., 32% of the crop was in good or excellent condition at the start of the week, the agency said. That’s down from 54% a year earlier.

Little or no rain has fallen in parts of the Southern Plains where hard-red winter varieties are grown in the past 30 days, according to the National Weather Service’s precipitation page.

About 66% of Kansas, the biggest wheat-producer in the U.S., is facing drought conditions, the U.S. Drought Monitor said in a report last week.

Around 1.9% of the state is seeing “exceptional” drought, the worst-possible rating. The exceptional drought is focused on the extreme southwestern corner of the state.

Oklahoma is faring worse with more than 76% of the state facing drought, the monitor said. Some 8.3% is seeing exceptional drought.

Wheat futures also are higher as Russia’s attacks on Ukraine continue.

Ukraine has accused Russia of war crimes after a mass grave was found that may contain as many as 300 bodies, according to media reports.

Fighting continues in the port town of Mariupol, which is mostly destroyed, as the war enters its 41st day. Vitali Klitschko, the mayor of the capital city of Kyiv, said residents shouldn’t return for at least a week.

Russia is expected to be the world’s largest exporter of wheat, while Ukraine is forecast to be the fourth-largest shipper, according to the USDA.

Wheat for May delivery jumped 46¢ to $10.56¼ a bushel overnight on the Chicago Board of Trade while Kansas City futures surged 46½¢ to $10.84¼ a bushel.

Corn futures rose 8¼¢ to $7.58¾ a bushel. 

Soybean futures for May delivery gained 13½¢ to $16.15¾ a bushel. Soymeal rose $3.80 to $458.90 a short ton and soybean oil futures added 0.64¢ to 72.98¢ a pound.

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2. Soybean Inspections Higher Week-to-Week, USDA Says

Inspections of soybeans for overseas delivery rose week-to-week while grain assessments declined, according to the USDA.

Soybean inspections in the seven days that ended on March 31 totaled 737,372 metric tons, up from 631,604 the previous week and well above the 384,662 tons assessed during the same week a year earlier, the agency said.

Corn examinations last week were reported at 1.53 million metric tons.

That’s down from 1.61 million tons a week earlier, but well below the 2.16 million tons assessed at the same point last year, the government said.

Wheat inspections came out at 297,341 metric tons, down from 343,087 tons the previous week, but below the 637,275 tons examined for export during the same week in 2021, the USDA said.

Since the start of the marketing year on September 1, the agency has inspected 44.2 million metric tons of soybeans for export, down from 54.7 million tons during the same time frame a year earlier.

Corn assessments since the beginning of September now stand at 30.6 million metric tons, down from the 36.2 million tons assessed during the same period last year, the agency said.

Wheat inspections since the start of the grain’s marketing year on June 1 are now at 17.2 million metric tons, down from the 21 million tons assessed at this point a year ago, the USDA said in its report.

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3. Red-Flag, Wind Warnings Issued For Much of West-Central U.S.

Red-flag and high-wind warnings have been issued from Montana’s border with Canada south through the west-central U.S. to the Texas border with Mexico, according to National Weather Service maps.

In central and eastern South Dakota, winds today will be sustained from 25 to 35 mph with gusts of up to 50 mph, the NWS said in a report early this morning.

Relative humidity is pegged as low as 20%.

In eastern Colorado, southwestern Kansas, and the Oklahoma and Texas panhandles, winds are forecast to gust up to 45 mph this afternoon, and humidity will drop as low as 9%, the agency said.

Winds in parts of southern Kansas, meanwhile, will be sustained from 35 to 45 mph with gusts of up to 70 mph expected.

“Damaging winds will blow down trees and power lines,” the NWS said. “Widespread power outages are expected.”  

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