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3 Big Things Today, July 20, 2022

Wheat Futures Surge Overnight; Ukraine Grain Export Talks Bring Optimism

1. Wheat Futures Jump in Overnight Trading

Wheat futures surged in overnight trading on some bargain hunting after earlier this week hitting the lowest in five months and as dry weather in parts of the U.S. northern Plains and Canadian Prairies threatens crops.

Earlier this week, wheat dropped to a five-month low, leading some speculative investors to jump back into the market.

Money managers last week cut their net-long positions in hard-red winter wheat contracts and raised their bearish bets on soft-red winter futures, according to data from the Commodity Futures Trading Commission.

In the northern Plains and southern Canadian Prairies where spring wheat is growing, some moisture stress is developing, though it likely will be limited to about a quarter of the countries' respective wheat crops, Commodity Weather Group said in a report.

Heat is threatening crops in the Pacific Northwest, and there may be some late filling stress in the 16- to 30-day outlook, CWG said.

Soybeans were modestly lower in overnight trading as some rainfall is expected in parts of the U.S. Corn Belt that's been facing extremely hot weather in recent days.

The hottest temperatures are now parked over parts of Oklahoma and Arkansas after threatening crops in much of the central and eastern Corn Belt the past few days.

Wheat for September delivery jumped 24 1/2¢ to $8.36 ¾ a bushel overnight on the Chicago Board of Trade while Kansas City futures added 22¢ to $8.91 ¼ a bushel.

Soybean futures for November delivery lost 9 1/4¢ to $13.49 a bushel. Soymeal declined $3.70 to $387.90 a short ton, while soybean oil futures were up 0.38¢ to 59.9¢ a pound.

Corn futures for December delivery fell 3/4¢ to $5.94 ½ a bushel.

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2. Ukraine Grain Talks Bring Optimism on Wheat, Corn Exports

Ukrainian wheat and corn may again flow to world markets after talks between several countries reportedly bore fruit.

Russian President Vladimir Putin and Turkish President Recep Tayyip Erdogan reportedly made progress on restarting shipments from Ukraine, but with some caveats.  

Putin said he is open to allowing grain exports from Ukrainian ports, but only if western countries lift sanctions it has on Russian agricultural products, according to several media reports. He also said he is open to resupplying Europe with gas but only if sanctions against the country are eased.

Exports of agricultural products from the war-torn country have been all but halted amid Russian attacks since February.

Before the war started, Ukraine was projected to be the world's third-largest exporter of wheat and the fourth-biggest shipper of corn, according to data from the USDA.

In June, Ukraine was only able to ship about 2.5 million metric tons of grain, well below the average of about 8 million tons prior to the start of the attacks, according to several reports.

Still, no deal is in place yet even after an agreement had reportedly been reached a week ago.

On July 13, Ukraine President Volodymyr Zelenskyy said he would work with the United Nations to finalize a plan to get grain flowing from his country.

UN Secretary-General Antonio Guterres said in a speech at the time there was "a ray of hope" to end the blockade on Ukrainian exports and help end food crises that have been exacerbated by the ongoing attacks by Russia.

After yesterday's meeting, Guterres is reportedly optimistic that a deal will be completed, a spokesman said.

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3. Hot Weather Continues in Southern Corn Belt Wednesday

The extremely hot weather that's been hammering parts of the U.S. Midwest is still hovering over parts of Oklahoma and Arkansas, while other states including parts of Missouri, Illinois and Indiana continue to bake, according to maps from the National Weather Service.

In eastern Oklahoma, excessive heat warnings have been issued as indexes are forecast to top out at about 115 degrees Fahrenheit, the NWS said in a report early this morning.

In Arkansas, heat indexes are expected to hit 116 degrees this afternoon.

In southern Illinois and Indiana, meanwhile, heat advisories will take effect from about noon as temperatures reach 105 degrees, the agency said.

"Hot temperatures and high humidity may cause heat illness to occur," the NWS said.

Further north in southwestern South Dakota and parts of eastern Wyoming, a red-flag warning is in effect due to extremely dry weather.

Winds will gust up to 35 miles an hour and relative humidity will drop as low as 10%, the agency said.  

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