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3 Big Things Today, July 13

Grains, Beans Lower in Overnight Trading; USDA Report Brings Bearish Surprises.

1. Grains, Beans Decline in Overnight Trading After Bearish WASDE

Grains and soybeans were all lower in overnight trading after negative reports from the USDA sent prices tumbling.

The USDA pegged corn and wheat stockpiles well above expectations, though forecasts for soybean inventories were below forecasts. Traders seemed to lump everything into the bearish category overnight, however, pushing prices down.

Futures also may be falling after several weather forecasters said they expect the heat dome that’s been leading to hot-weather advisories all week to move out of the central Corn Belt by the end of the week. A new system is following that and may bring some rain to areas that need it.

Corn for December delivery lost 4¼¢ to $3.94½ a bushel overnight on the Chicago Board of Trade.

Wheat for September delivery fell 11½¢ to $5.25½ a bushel, and Kansas City futures declined 12½¢ to $5.31½ a bushel.

Soybeans for November delivery lost 20¾¢ to $10.13¼ a bushel overnight. Soy meal fell $7 to $336.30 a short ton, and soy oil futures declined 0.36¢ to 33.63¢ a pound.

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2. USDA Grain Stockpiles Estimates Top Trade Expectations, Corn Yields Left Unchanged

The USDA corn and wheat stockpiles estimates certainly weren’t what traders and analysts had expected, and the result definitely wasn’t what growers wanted.

Prices are tanking this morning after the USDA pegged stockpiles for corn in the current marketing year at 2.37 billion bushels, easily topping analyst forecasts for 2.31 billion and last month’s 2.295 billion bushels.

Inventories in the 2017-2018 marketing year that starts on September 1 – after the harvest – were pegged at 2.325 billion bushels, well above last month’s forecast of 2.11 billion and analyst estimates of 2.18 billion bushels.

For the 2017-2018 year, the USDA raised its forecast for production to 14.255 billion bushels from 14.065 billion last month. Total use, meanwhile, rose only slightly.

Many analysts had expected the agency to cut its outlook for a 170.7-bushel crop due to the hot, dry weather in the Northern Plains and Midwest, but instead, it left its outlook unchanged for now.

In wheat, inventories at the end of the current marketing year that started on June 1 will total 938 million bushels, according to the government, well above estimates for 876 million and last month’s projection for 924 million.

Soybean inventories for the 2016-2017 marketing year are seen by the USDA at 410 million bushels, missing estimates for a drop to 430 million. For next year, inventories were pegged at 460 million bushels, on par with forecasts for 460 million bushels and down from the prior month’s 495 million.

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3. Fewer Heat Advisories Issued Thursday, Rain Won’t Stop in Eastern Midwest

Fewer heat advisories were issued this morning in the Midwest, as a heat wave that’s been parked over the Midwest for much of the week heads east.

There’s still a narrow band of land stretching from eastern Oklahoma into southern Illinois where temperatures are expected to reach the 90s with indexes as high as 107˚F. Still, that’s better than yesterday when almost the entire state of Missouri and several counties in many surrounding states were under heat advisories.  

Farther east, excessive rainfall in much of Indiana, southern Michigan, and Ohio are leading to flash floods throughout the states.

As much as 3 more inches of rain have fallen in the region, which has been inundated with precipitation for much of the week. Runoff from the rain will continue to cause flash flooding.

Excessive precipitation in parts of southern Wisconsin is also causing flooding as several cities, towns, and farm fields are under water this morning.

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