3 Big Things Today, August 12, 2020

Soybeans, Corn Little Changed; USDA Likely to Raise Production, Yield Estimates.

1. Soybean and Corn Futures Little Changed Overnight

Soybean and corn futures were little changed overnight ahead of today’s World Agricultural Supply and Demand Estimates (WASDE) report.

The August WASDE is expected to show increased production and yields for corn, beans, and wheat, according to analysts surveyed by Bloomberg.

Favorable weather in much of the Midwest the past couple of months has led to lofty crop ratings across the board.

About 74% of the U.S. soybean crop was in good or excellent condition as of Sunday, up from 73% a week earlier and 54% at this point in 2019, according to the Department of Agriculture.

Corn was 71% good or excellent at the start of the week, down 1 percentage point from the previous week but well above the 57% that earned top ratings at the same time last year, the USDA said.

In the past 30 days, much of the Midwest including Nebraska, Kansas, Missouri, and southern Illinois have all received from double to four times the normal amount of rainfall, National Weather Service maps show.

Still, almost all of Iowa, southern Wisconsin, and about the northern quarter of Illinois has received little or no rain. That, combined with this week’s derecho wind storm, has left overall yields and production in question.

Today’s WASDE and crop production reports will be released at noon in Washington.

Soybean futures for December delivery rose ¼¢ to $8.73¾ a bushel overnight on the Chicago Board of Trade. Soymeal lost 40¢ to $289.10 a short ton, and soy oil gained 0.17¢ to 30.68¢ a pound.

Corn futures for December delivery were unchanged at $3.23½ a bushel.

Wheat futures for September delivery fell 3½¢ to $5.00¼ a bushel overnight while Kansas City futures dropped 2¾¢ to $4.24½ a bushel.

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2. Corn and Soybean Production Seen Higher in Wednesday’s Reports

The USDA is expected to bump its forecasts for corn and soybean production in Wednesday’s WASDE and crop production reports, though the recent wind storm that damaged crops and farm buildings alike may curb any hopes of an actual increase.

Analysts polled by Bloomberg are expecting the USDA to increase its corn-production outlook to 15.177 billion bushels on yield of 180.5 bushels per acre, researcher Allendale said in a note to clients. That’s up from last month’s predictions for 15 billion bushels and 178.5 bushels, respectively.

Soybean output is expected to be pegged at 4.26 billion bushels on yields of 51.2 bushels an acre vs. the previous outlook of 4.14 billion bushels and yields of 49.8 bushels per acre.

Wheat production is likely to be forecast at 1.83 billion bushels vs. the prior month’s forecast for 1.82 billion bushels, the analysts said.

Still, the so-called derecho – a widespread windstorm that snapped stalks and flattened farm buildings in parts of Nebraska, Iowa, and other parts of the Corn Belt – may negatively impact output, Allendale said.

“While today’s WASDE may show large corn and soybean yields, many in the trade question these numbers in the face of Monday’s storm,” the researcher said. “The trade discussion suggests downward revisions coming for September’s report where in-field analysis is included.”

Ending stocks for corn are pegged at 2.8 billion bushels vs. July’s outlook for 2.65 billion, and the USDA is expected to raise its outlook on soybean inventories to 524 million bushels from 425 million last month.

Wheat inventories are likely to be seen at 946 million bushels, up from 942 million in July, the analysts said.

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3. Heat Expected in Oklahoma While More Wind and Rain Forecast For Iowa

It’s hot again in Oklahoma where heat advisories are in effect starting at 1 p.m. as temperatures climb, according to the National Weather Service.

Heat indexes are expected to hit about 106°F. today in parts of central Oklahoma, the NWS said in a report early this morning.

“The combination of hot temperatures and high humidity will combine to create a dangerous situation in which heat illnesses are possible,” the agency said.

It’s not just the heat that weather watchers will be keeping an eye on. Severe storms are expected in eastern parts of the state where hail, wind gusts of up to 60 mph, and rain are forecast overnight.

Farther north in eastern Nebraska and western Iowa, meanwhile, scattered storms are forecast for tonight with some producing hail and more strong winds, the NWS said.

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