3 Big Things Today, January 26, 2022
1. Wheat Futures Drop as Russia-Ukraine Talks Begin
Wheat reversed course, plunging overnight, as investors who were long the market, or bet on higher prices, sold contracts and booked profits as talks between Russia and Ukraine begin.
Futures hit a two-month high yesterday amid rising tensions between the countries and worsening crop conditions in Kansas, the biggest U.S. producer of the grain.
Officials from the sparring countries will meet in Paris today to calm tensions even as Russia reportedly adds to the 100,000 troops it already has on the Ukraine border.
The meeting also will be attended by officials from France and Germany.
Easing tensions will weigh on prices as escalation between the countries would likely end up curbing wheat exports.
Russia is expected to be the world's largest exporter of the grain, shipping 35 million metric tons in the current marketing year, according to data from the U.S. Department of Agriculture. Ukraine is forecast to ship 24.2 million tons of wheat this year.
In the U.S., meanwhile, snow is expected to fall in parts of the southern Plains today, easing concerns about what's thus far been a dry, cold winter in parts of southwestern Kansas and the Oklahoma and Texas panhandles.
Wheat for March delivery fell 11 1/2¢ to $8.06 ½ a bushel overnight on the Chicago Board of Trade, while Kansas City futures dropped 9 3/4¢ to $8.24 ¾ a bushel.
Soybean futures for March delivery rose 3¢ to $14.10 ¼ a bushel overnight. Soymeal added 80¢ to $392.80 a short ton and soybean oil futures gained 0.29¢ to 62.8¢ a pound.
Corn futures for March delivery fell 1¢ to $6.17 ½ a bushel.**
2. South American Weather Outlook Mixed, CWG Says
Brazil likely will see rain in March, boosting the second corn crop in the South American country, while Argentina also will turn wetter in the next couple of months, Commodity Weather Group said in its seasonal outlook released this week.
"Wetter March in Brazil aids safrinha corn, but April (and) May dryness could cause late stress," CWG said.
Both the rain and the dry weather will have mixed results on South American crops.
The dry weather will help with crop collection but also may lead to problems late in the growing cycle for corn, the forecaster said.
"Expanding dryness during April (and) May improves Brazil harvest but could cause very late stress in southeast half (of) safrinha corn that trims yield potential (but much lesser threat than last season," CWG said. "Dryness develops too late for major impacts to coffee (and) sugar."
In Argentina, dry areas will linger in March but rainfall is likely in April, which will ease crop stress on double-cropped soybeans.
Some early frost risks are likely, and the harvest may be slowed by the late rains, Commodity Weather Group said.
Further down the road, the firm said its outlook shows a weakening La Nina weather pattern in the fall.
Sea-surface temperatures are forecast to be mostly normal to "warm-leaning" in the south Atlantic off the coast of Argentina, the forecaster said.
3. Snow Expected in Oklahoma and Texas Panhandles
Snow is forecast for much of the Oklahoma and Texas panhandles as winter weather moves into the area, according to the National Weather Service.
One to 3 inches of snow are likely in the southern Plains as a winter storm blows through the region, the NWS said in a report early this morning.
A winter-weather advisory is in effect until 6 p.m. tonight.
"Be prepared for slippery roads. Slow down and use caution while driving," the agency said. "If you are going outside, watch your first few steps taken on stairs, sidewalks and driveways."
Further north, the extreme cold weather continues for much of the northern Midwest.
In northern Iowa and southern Minnesota, wind-chill warnings are in effect as values are forecast to drop as low as minus-40 degrees Fahrenheit this morning.
A wind-chill warning is in effect until noon.
In northern Minnesota and North Dakota, meanwhile, a winter-weather advisory will remain in effect until noon amid snow and winds gusting up to 45 miles an hour.
"Areas of blowing snow could significantly reduce visibility," the NWS said. "The dangerously cold wind chills could cause frostbite on exposed skin in as little as 10 minutes."