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3 Big Things Today, August 10, 2022

Soybeans, Grains Rise Overnight; Output Forecasts Down Ahead of Friday Reports

1. Soybean and Grain Futures Modestly Higher Overnight

Soybean and grain futures were higher in overnight trading on signs of demand for U.S. products and reduced global output.

The U.S. Department of Agriculture yesterday reported sales of 133,000 metric tons of corn to China for delivery in the 2022-2023 marketing year that starts on Sept. 1.

On Monday, the USDA announced sales of 132,000 metric tons of soybeans to China, 105,000 tons of corn to Italy and 120,000 tons of corn to an unnamed country. Export sales of 132,000 metric tons of soybeans to China and 132,000 tons to an unknown buyer were announced Friday.

Grain production in Russia, meanwhile, may be smaller than expected.

Output is seen by the Ministry of Agriculture at about 130 million metric tons, Commerzbank analyst Carsten Fritsch said in a note to clients.

Russian grain exports likely will have to be revised down from where they stand now at 50 million metric tons.

"The reason given by the ministry for the lower crop is the slow start to harvesting on account of the cool spring, rainfall and a lack of spare parts for foreign agricultural equipment," Fritsch said. "The latter is probably connected to the West's sanctions."

The government in Russia is making domestic use a priority, which will affect even exports unaffected by the sanctions.

Soybean futures for November delivery rose 2¢ to $14.30 ¾ a bushel overnight on the Chicago Board of Trade. Soymeal added $3.30 to $413.50 a short ton, while soybean oil futures fell 0.56¢ to 64.06¢ a pound.

Corn futures for December delivery were up 1 3/4¢ to $6.15 ½ a bushel.

Wheat for September delivery gained 8 3/4¢ to $7.90 ¼ a bushel while Kansas City futures gained 7 1/2¢ to $8.59 ¼ a bushel.

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2. Production Estimates for Corn, Beans Likely to Be Lowered

Corn and bean production estimates likely will be lowered from the July outlook when the Ag Department releases its monthly supply and demand reports on Friday.

Analysts polled by Reuters are expecting the USDA to project corn output at 14.392 billion bushels for the 2022-2023 marketing year when the agency release its August report, down from 14.505 billion bushels forecast last month.

The average yield projection is for 175.9 bushels an acre. Harvested area is seen at 81.837 million acres, the poll shows.

In July, the agency said it expected yield of 177 bushels an acre on harvested area of 81.94 million acres.

Production in the 2021-2022 marketing year was 15.115 billion bushels on yield of 177 bushels an acre. Harvested area was 85.4 million acres.  

Soybean production likely will be pegged at 4.481 billion bushels in the marketing year that starts on Sept. 1, down from the previous month's outlook for 4.505 billion bushels.

Friday's report likely will show yield of 51.1 bushels an acre on harvested area of 87.724 million acres, the Reuters survey said.

Soybean output in the 2021-2022 marketing year that ends on Aug. 31 was 4.435 billion bushels. Yield is seen at 51.4 bushels an acre on harvested area of 86.3 million acres.


3. Storms Expected in Parts of Nebraska Into the Weekend

Thunderstorms are expected in parts of north-central Nebraska into the Sandhills today, though no severe weather is expected, according to the National Weather Service.

Even with the threat of storms, hot weather will prevail as heat indexes will be in the upper 90s this afternoon, the NWS said in a report early this morning.

The hot weather will continue in the area into the weekend as highs Thursday through Sunday are expected to reach the high-90s or low-100s on each day, the agency said.

Further west, storms are expected starting tomorrow in parts of northwestern South Dakota.

The storms likely will continue through Friday, though they likely won't be severe, the NWS said. Heat also will be an issue in South Dakota where indexes will climb into the triple digits on Thursday afternoon.

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