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3 Big Things Today, July 19

Grains, Beans Higher in Overnight Trading; USTR Goals For Ag Welcomed.

1. Grains, Beans Higher Overnight as Heat Wave Expands in Corn Belt

Grains and beans were higher in overnight trading, as a heat wave rolls through the Midwest, bringing triple-digit temperatures to the heart of the Corn Belt.

The area of the central U.S. in heat advisory watches, warnings, or advisories has expanded from yesterday morning.

Counties stretching from central South Dakota south through almost all of Nebraska and the eastern two thirds of Kansas and all the way east into Indiana are now under some sort of heat watch or warning, according to the National Weather Service.

Crop conditions declined this week with corn, beans, and wheat all dropping by 1 percentage point due to the extremely hot weather this summer. The heat is expected to persist for at least the rest of the week, NWS data show.

Wheat for September delivery rose 1¾¢ to $5.05½ a bushel overnight on the Chicago Board of Trade, and Kansas City futures added 1¼¢ to $5.04 a bushel.

Corn for December delivery added 5¼¢ to $3.96 a bushel.

Soybeans for November delivery rose 3½¢ to $10.05¼ a bushel overnight. Soy meal gained $1.20 to $332.10 a short ton, and soy oil futures added 0.06¢ to 33.65¢ a pound.

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2. Nothing Too Surprising in U.S. Trade’s Agriculture Goals For NAFTA Renegotiation

There was nothing that was earthshaking in the U.S. Trade Representative’s (USTR) goals for agriculture when it begins renegotiating the North American Free Trade Agreement, but the first item listed is to keep market duty-free for farm products.

The USTR wants to “maintain existing reciprocal duty-free market access for agricultural goods,” the agency said in a release sent earlier this week.

While it’s hardly a surprise, the government wants to leave duty-free status for ag products, hearing it from the USTR is welcome news for groups that were uncertain what the much-anticipated document would say when released.

The National Association of Wheat Growers (NAWG) said in a statement that it is “happy” to see that item in the list of goals.

“Because NAFTA helped make Mexico one of the most important export markets for U.S. wheat, our main priority right now is to do no harm to wheat trade,” NAWG president and wheat grower David Schemm said. “We are happy to see that the objectives call for maintaining existing reciprocal duty-free market access for agricultural goods. Mexican buyers import more of the wheat my neighbors and I grow than any other country, and we can’t afford to risk interrupting that positive relationship with our customers.”

The USTR said it also wants to expand market opportunities for U.S. agricultural products in NAFTA countries and to reduce or eliminate tariffs on goods shipped from the U.S. It wants to also eliminate nontariff barriers to agricultural exports and get rid of “unnecessary differences in regulation,” according to the list of goals.

Though it’s uncertain exactly when negotiations will begin, they’re expected some time next month.

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3. Extreme Heat Expected For Central U.S.; North Dakota May See Rainfall  

It’s going to be another scorcher today in the central U.S. with heat indexes stretching toward 110˚F. in several states, according to the National Weather Service.

Temperatures – not heat indexes – are expected to reach into the triple digits in the northern half of Missouri, southern Iowa, and large parts of Nebraska, Kansas, and Illinois today. An “excessive heat warning” is in effect for the area.

Skirting that area is an excessive heat advisory where temperatures will likely top out in the 90s but heat indexes will still reach 105˚F., the NWS said.

There is some good news this morning, however, as a thunderstorm warning has been issued for a few counties in North Dakota where rain has been absent this year.

“Thunderstorms are expected to develop early this morning across western and central North Dakota,” the NWS said. “The storms will likely expand in coverage as they move quickly to the east or southeast today.”

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