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3 Big Things Today, August 2

Corn, Beans Higher Overnight; INTL FCStone Pegs Output Below USDA.

1. Corn, Soybean Futures Improve Overnight as Low Prices May Spur Demand

Corn and soybean futures were higher overnight on speculation demand would improve after the recent sell-off.

Corn futures lost 8¢ yesterday and soybeans dropped 35¢, which some investors believe will spur demand for U.S. supplies. The crop year for corn and soybeans ends on August 31, so the hope is that importers will start buying supplies for the 2017-2018 marketing year.

A weaker dollar also may help improve demand for U.S. supplies, as it gives overseas buyers more purchasing power. The greenback is down 0.1% in early trading, and earlier this week touched the lowest level against a basket of international currencies since January 2015.

Prices also gained after FCStone, in a report on Tuesday, pegged U.S. production well below estimates by the USDA.

Prices yesterday plunged amid better-than-expected crop conditions for soybeans. About 61% of the crop was rated good or excellent this week, up more than some had expected. Rainfall last week improved crop prospects. The price drop came despite corn ratings being unexpectedly lower week over week.

Corn futures for December delivery added 2¾¢ to $3.79¼ a bushel overnight on the Chicago Board of Trade.

Soybeans for November delivery gained 5½¢ to $9.77¼ a bushel in Chicago. Soy meal rose $1.70 to $316.20 a short ton, and soy oil futures added 0.18¢ to 34.46¢ a pound.

Wheat for September delivery rose 4¢ to $4.65¼ a bushel, and Kansas City futures gained 3½¢ to $4.68¾ a bushel.


2. INTL FCStone Pegs Corn, Soybean Output, Yield Below USDA July Forecasts

INTL FCStone isn’t as convinced about the condition of U.S. corn and soybean crops as the Department of Agriculture, judging by its latest yield and production forecasts.

The commodity brokerage, in a report on Tuesday, pegged the corn crop at 13.59 billion bushels on yields of 162.8 bushels an acre.

That’s well below USDA’s July projections of 14.255 billion bushels on yields of 170.7 bushels an acre.

INTL FCStone said soybean output will total 4.235 billion bushels on yields of 47.7 bushels an acre. As with corn, that’s below the USDA forecast of 4.26 billion bushels and yields of 48 bushels an acre.

The USDA will release its August World Agricultural Supply and Demand Estimates (WASDE) report next week. A run of hot, dry weather in parts of the Midwest along with excessive rainfall that caused flooding in the eastern Corn Belt likely reduced yields, though it’s uncertain if the government will lower its forecasts in the upcoming report.

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3. Round of Storms Heads Into Upper Midwest, Sets Sights on Great Lakes

Another round of storms (some could be severe) is moving through the Central Plains into the Upper Midwest, which should bring along with it some rain showers.  

Thunderstorms are expected for the next three days in parts of eastern Iowa and central Illinois as a storm moves north out of Missouri. While most of the storms will only bring rain, some might turn severe today and tomorrow, according to the National Weather Service.

Still, some rivers and tributaries near the Mississippi River along the Iowa-Illinois border are still above flood stage. The storms could worsen the flooding, the agency said.

“Severe thunderstorms containing damaging winds, large hail, heavy rainfall, and a few isolated tornadoes will be possible this afternoon into tonight,” the NWS said in a report early Wednesday. “The threat is expected to shift east into the Great Lakes region by Friday. In addition, heavy rainfall could cause localized flooding concerns.”

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