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3 Big Things Today, December 15, 2021

Wheat Futures Fall Overnight; Kansas Wheat Conditions Worsening.

1. Wheat Futures Drop in Overnight Trading

Wheat futures plunged in overnight trading on easing worries about global supplies.

The U.S. Department of Agriculture last week raised its outlook for global wheat production and stockpiles in its monthly World Agricultural Supply and Demand Estimates (WASDE) report.

World production in the 2021-2022 marketing is now forecast at 777.9 million metric tons, up from a prior outlook for 775.3 million tons, the USDA said. Ending stocks are pegged at 278.2 million metric tons, up from the previous month’s projection for 275.8 million tons.

If realized, that would be up from the previous year’s output of 775.9 million metric tons, though stockpiles would decline from 289.6 million tons a year earlier, the agency said.

The Australian Bureau of Agricultural and Resource Economics and Sciences said late last month said it now expects its growers to produce a record 34.4 million metric tons this year, up from 32.6 million tons a year earlier.

The U.S. Ag Department said in its report last week it expects Australian output at 34 million metric tons, up from the previous outlook for 31.5 million tons.

Corn and soybean futures were mixed.

Demand for U.S. products has waned this week with no export sales announcements indicating sales of at least 100,000 metric tons of agricultural items sold since Dec. 9, according to the government.

Wheat futures for March delivery dropped 9½¢ to $7.77½ a bushel overnight on the Chicago Board of Trade, while Kansas City futures lost 8½¢ to $8.03¾ a bushel.

Corn futures for December delivery were down 1¼¢ to $5.89 a bushel.

Soybean futures for November delivery gained 2¼¢ to $12.61¾ a bushel. Soymeal was up $3.70 to $380.60 a short ton, while soy oil fell 0.58¢ to 51.66¢ a pound.

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2. Kansas Wheat Conditions Worsening as Drought Spreads

Kansas wheat conditions worsened week-to-week as dry weather continues in the Southern Plains, the USDA said in its last weekly crop report of the 2021 growing season.

Down from 58% a week earlier, 51% of the crop was in good or excellent condition as of Sunday, the agency said.

About 14% of the crop was in poor or very poor condition, up from 12% the previous week.

Dry weather has been worsening in Kansas, the biggest producer of wheat in the U.S., with just over 19% experiencing drought conditions, according to the U.S. Drought Monitor.

That’s little changed week-to-week, but well above the 5.9% of the state that was seeing drought just three months ago, said the monitor, which is scheduled to be updated tomorrow.

U.S. wheat production in the 2021-2022 marketing year that started on June 1 is pegged by the USDA at 1.646 billion bushels, down from 1.83 billion a year earlier. Yield nationally is forecast to plunge to 44.3 bushels an acre from 49.7 bushels, the government said in a report last week.

Ending stockpiles are seen at 598 million bushels, well below the 845 million that were left in storage at the end of the previous marketing year.

In the week that ended on Dec. 12, topsoil moisture was rated 37% adequate and 0% surplus. That’s a drastic decline from 47% adequate and 1% surplus a week earlier.

Subsoil moisture was 43% adequate and 0% surplus vs. 50% adequate and 1% surplus seven days earlier, the USDA said in its report.

The USDA will begin issuing monthly crop progress reports for Kansas starting January 3.

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3. Strong Winds Expected For Much of the U.S. Wednesday

Strong winds and winter storms are the main weather threats in the U.S. as warnings and watches dominate maps Wednesday morning.

High winds are expected for much of the central U.S. with warnings stretching from as far west as Arizona northeast into Michigan, according to the National Weather Service.

In the Southern Plains where hard-red winter wheat is growing, wind gusts will top 70 mph and relative humidity is forecast from 5% to 10%, the NWS said in a report early this morning.

High-wind warnings are in effect from 9 a.m. to 6 p.m. today, the agency said.

“Damaging winds will blow down trees and power lines,” the NWS said. “Widespread power outages are expected. Travel will be difficult, especially for high-profile vehicles.”

In eastern Nebraska and western Iowa, meanwhile, wind will be sustained from 30 to 40 mph with gusts up to 65 mph, the agency said.

The area’s high-wind warning will be in effect from noon until 9 p.m. today. As in Kansas, trees may fall and power lines may topple due to the wind, and travel will be difficult.

“People should avoid being outside in forested areas and around trees and branches. If possible, remain in the lower levels of your home during the windstorm, and avoid windows. Use caution if you must drive.”

In North Dakota, a winter weather advisory has been issued as up to 2 inches of snow are expected later today into Thursday.

Blowing snow could reduce visibility and packed snow may make roads unsafe, the NWS said.

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