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3 Big Things Today, July 15, 2022

Wheat Futures Rise Overnight; Spring Growth Behind Normal Pace

1. Wheat Futures Higher in Overnight Trading

Wheat was higher in overnight trading after some good demand news, while corn and soybeans rose due to hot weather in the central U.S.

Exporters reported wheat sales of 1.02 million metric tons in the week that ended on July 7, the U.S. Department of Agriculture said in a report on Thursday.

That's up from 286,400 metric tons a week earlier and a substantial gain from the prior four-week average, the USDA said.

China was the big buyer, taking 265,300 metric tons, followed by South Korea at 148,400 tons and Mexico at 91,300 tons. An unnamed country bought 74,300 metric tons and Guatemala purchased 69,800 tons of U.S. wheat.

Exports for the week, however, fell 6% to 270,000 metric tons as South Korea, Mexico, Guatemala, Taiwan and Peru took deliveries, the agency said.

Corn sales for the 2021-2022 marketing year that ends on Aug. 31, meanwhile, were dismal at 59,000 metric tons, falling 72% from the prior four-year average. Soybeans saw a net-reduction due to a large group of cancellations, USDA data show.

Corn sales for the 2022-2023 marketing year that starts on Sept. 1 came in at 348,200 metric tons, up from only 111,200 tons a week earlier. Soybean sales for the next marketing year were reported at 113,900 tons, down from 240,100 tons the previous week.

Still, corn and soybean futures were higher in overnight trading due to extremely hot weather in much of the central U.S.

Extreme heat is expected today in parts of Nebraska, Iowa, Kansas, Missouri, Oklahoma and Arkansas, the National Weather Service said.

Heat indexes will reach well into the triple digits this afternoon and into the weekend. 

Wheat for September delivery rose 4¢ to $7.99 a bushel overnight on the Chicago Board of Trade while Kansas City futures gained 1¢ to $8.49 ¾ a bushel.

Corn futures for December delivery were up 4 1/2¢ to $6.05 ½ a bushel.

Soybean futures for November delivery rose 4 1/4¢ to $13.45 ¼ a bushel. Soymeal fell $1.10 to $401.50 a short ton, while soybean oil futures gained 0.53¢ to 56.31¢ a pound.

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2. Spring Wheat Behind Normal Pace But Conditions Lofty, USDA Says

Spring wheat in the U.S. is behind its normal growth pace due to "excessively wet conditions" during planting, which was delayed this year, the USDA said in it July Wheat Outlook report.

Still, producers were incentivized to grow the grain due to high prices, the agency said.

Planting started in earnest around the beginning of April, according to government data. By May 8, only 27% of the crop was in the ground, well behind the prior five-year average for that date of 47%.

Throughout May, however, farmers managed to catch up with the average, and sowing was finally finished around June 19, according to the USDA.

"With planting delayed, development of the crop has also consequently lagged the typical pace," the agency said.

Indeed, only 44% of U.S. spring wheat was headed as of July 10, behind the average of 77% for this time of year. Still, that's up from only 20% a week earlier.

Seventy percent of the crop was in good or excellent condition at the start of this week, up from 66% a week earlier and well above the 16% that earned top ratings at this point last year, the government said.

The USDA, in its crop production report released this week, has pegged spring-wheat yields at 47 bushels an acre. If realized, that would be up from 32.6 bushels an acre last year.

Yields in North Dakota, the biggest producer of spring varieties in the U.S., are forecast at a record 51 bushels an acre, the USDA said in its report.

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3. Hot Weather Settles Over Central U.S.

Hot weather is the name of the game this July as more heat advisories have been issued for the central U.S., according to the National Weather Service.

The advisories stretch from southwestern Iowa south into eastern Oklahoma, and encompass most of Kansas, NWS maps show.

In southwestern Iowa and southeastern Nebraska, heat indexes likely will rise to 105 degrees Fahrenheit today, the agency said.

Central Kansas may see values around 108 degrees this afternoon, and southeastern Oklahoma may see a heat index of 106 degrees.

Further north, storms are moving through parts of Minnesota and Wisconsin. A flash-flood warning is in effect until 8:15 a.m. local time in central Wisconsin as small creeks and streams overrun their banks, flooding low-lying areas, the NWS said.

"Additional thunderstorms will be possible through the weekend at times, as well as during the middle part of next week" in parts of Wisconsin, the agency said.

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