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3 Big Things Today, August 19, 2022

Soybeans Lower in Overnight Trading; Drought Narrows in Western Corn Belt

1. Soybean Futures Drop in Overnight Trading

Soybeans tanked in overnight trading as rain is expected in parts of the Midwest this weekend, improving prospects for crops.

Precipitation is expected in both Iowa and Illinois starting today and lasting through the weekend, according to the National Weather Service. Drought conditions have eased slightly in the western Midwest while remaining largely unchanged in the eastern Corn Belt.

Rain will favor west-central areas of the Corn Belt Saturday and central and eastern areas Sunday, said Don Keeney, an agricultural meteorologist with Maxar.

Showers in northwestern areas of the Midwest likely will boost crop conditions, though moisture may decline in west-central areas, the forecaster said in a report.

In the Delta region, rains likely will favor southern parts of the area through the weekend, Keeney said.

Precipitation is expected to further improve soil-moisture conditions for soybeans but will slow corn drydown and harvesting, he said.

Speculative investors who were long the market, or bet on higher prices, also may be taking money off the table this morning amid uncertain weather in some areas over the weekend.

Rain hasn't been exactly ample in parts of South Dakota, southwestern Minnesota, the eastern two-thirds of Iowa and all of Illinois and Indiana in the past week, according to the National Weather Service's precipitation page.

Little or no rain also has fallen in much of Kansas and Oklahoma the past seven days, the NWS said.

The uncertainty between what areas are dry and what areas receive rain may be keeping some money managers out of the market, at least for now.

Soybean futures for November delivery declined 13 1/2¢ to $13.91 ¾ a bushel overnight on the Chicago Board of Trade. Soymeal was down $4.20 to $403.70 a short ton, while soybean oil futures fell 0.24 ¢ to 64.03¢ a pound.

Corn futures for December delivery were down 1¢ to $6.14 ¾ a bushel.

Wheat for December delivery were up 5¢ to $7.54 a bushel while Kansas City futures gained 6¢ to $8.21 ¼ a bushel.

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2. Drought Eases Slightly in Western Corn Belt, Little Changed in Midwest

The amount of land facing drought eased slightly in the western Corn Belt but was largely unchanged in the eastern Midwest, according to the U.S. Drought Monitor.

In a six-state region that includes Wyoming, Colorado, Kansas, Nebraska, South Dakota and North Dakota, about 51% of land was suffering from drought conditions, the monitor said in a report.

That's down from 53% a week earlier and 72% three months ago.

Just over 76% of Nebraska was seeing drought as of Aug. 16, down from 80% a week earlier and 94% a quarter-year ago, the group said. About 72% of Kansas was suffering from drought conditions, unchanged week-to-week, though that's up from 66% three months ago.

In the eastern Midwest, which includes Minnesota, Iowa, Missouri, Illinois, Wisconsin, Michigan, Indiana, Ohio and Kentucky, around 14.5% was in drought, down slightly from 15% a week earlier. Still, that's up from less than 1% three months ago.

About 39% of Iowa, the biggest U.S. producer of corn and soybeans, is seeing drought, unchanged week-to-week but up from 6.9% in mid-May, the report said.

Illinois, the second-biggest grower of both crops, is barely seeing any as only 5.2% of the state is suffering from drought conditions. That's still up from 4.9% a week earlier and zero percent three months ago, the Drought Monitor said.

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3. Storms Expected in Iowa, Illinois This Weekend

Weather maps are looking relatively quiet heading into the weekend, though adverse conditions linger, according to the National Weather Service.

Thunderstorms are expected this afternoon and evening in parts of western and northern Iowa, the NWS said in a report early this morning.

"A few strong to severe storms will be possible into the evening with large hail and damaging winds the primary threats," the agency said. "A brief funnel cloud is also possible."

More rain is expected Saturday in the area, along with some gusty winds and funnel clouds.

Precipitation also is expected today in northern Illinois, though the risk of severe thunderstorms or flooding are limited, the NWS said.

Storms will fire up over the weekend and head into northern Indiana on Monday.

Damaging winds are possible with the strongest of the storms, which is expected to hit the area Saturday and Saturday evening, the agency said.

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