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3 Big Things Today, January 19, 2022

Wheat Futures Higher Overnight; Export Inspections Up Across the Board.

1. Wheat Futures Jump on Russia-Ukraine Tensions

Wheat futures surged in overnight trading amid tensions between Russia and Ukraine, the largest and third-biggest exporters of the grain, respectively.

Russia has been moving troops in what some consider a hostile move toward Ukraine.

U.S. Secretary of State Antony Blinken spoke yesterday with Russian Foreign Minister Sergey Lavrov in a bid to de-escalate the “tensions surrounding the deeply troubling Russian military buildup in and near Ukraine,” according to a statement from the U.S. State Department.

Canada has reportedly sent some special operations teams to Ukraine and the U.S. is reportedly weighing increased measures to help Ukraine should Russia attack.

An attack on Ukraine or even rising tensions between two of the world’s largest wheat exporters likely will disrupt the markets.

Also giving prices a boost is continued dry weather in the U.S. Southern Plains.

Little or no rain has fallen in the region in the past 30 days, according to data from the National Weather Service’s precipitation page.

About 58% of Kansas, the biggest producer of the grain, was suffering from drought conditions last week, up from 52% a week earlier and only 15% three months ago, according to the U.S. Drought Monitor.

Wheat for March delivery jumped 13½¢ to $7.82½ a bushel overnight on the Chicago Board of Trade while Kansas City futures gained 15¼¢ to $7.88 a bushel.

Soybean and corn futures also surged overnight on reports that more hot weather is headed to parts of Brazil and Paraguay, which should further stress crops in the South American countries.

About a fourth of Brazil and 70% of Paraguay are suffering from drought stress, Commodity Weather Group said in a report.

“Relief minimal for southern Brazil (and) Paraguay drought areas for at least another week,” which likely will result in diminishing yield potential, the forecaster said.

In Argentina, temperatures hit record highs, topping 100°F., but rainfall this week in about half of the country’s corn and soybean growing areas will linger the next couple of days, CWG said.

Soybean futures for March delivery jumped 14¼¢ to $13.75½ a bushel overnight. Soymeal gained $4.10 to $394.20 a short ton, and soybean oil futures added 0.91¢ to 59.99¢ a pound.

Corn futures for March delivery surged 7¢ to $6.06½ a bushel.

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2. Weekly Export Inspections Rise Across The Board

Inspections of corn, wheat, and beans for overseas delivery all jumped in the seven days that ended on January 13, according to the USDA.

Corn assessments were reported at 1.2 million metric tons, up from 1.02 million a week earlier, the agency said in a report.

That’s also up from the 934,140 metric tons examined during the same week a year earlier.

Wheat inspections last week totaled 369,188 metric tons, up from 234,356 tons the previous week and 283,850 tons at the same time in 2021, the USDA said.

Examinations of soybeans for offshore delivery jumped to 1.72 million metric tons, up from 985,455 tons a week earlier. Still, the total was down from the 2.33 million tons assessed during the same week last year, government data show.

Since the start of the marketing year on Sept. 1, the agency has inspected 15.3 million metric tons of corn for export, down from the 17.5 million tons examined during the same time frame a year earlier.

Soybean inspections since the beginning of September are now at 33.4 million metric tons, down from 43.5 million tons during the same period last year, the government said.

Wheat assessments since the start of the grain’s marketing year on June 1 now stand at 63.6 million metric tons, well below the 79.2 million tons examined at the same point in 2021, the USDA said in its report.

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3. Wind-Chill Warnings, Advisories in Effect in Central U.S.

Extremely cold weather is blanketing the Northern Plains into the central Corn Belt, according to the National Weather Service.

In North Dakota, a wind-chill warning is in effect until noon tomorrow as values are expected to drop as low as -45°F., the NWS said in a report early this morning.

“The dangerously cold wind chills could cause frostbite on exposed skin in as little as five minutes,” the agency said. “Wind chills will improve some during the day Wednesday, but still remain very cold.”

A wind-chill advisory is in effect for all of Iowa, where values are expected to drop to around -20°F. to -25°F. today and as low as -30°F. tomorrow morning, the NWS said.

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