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3 Big Things Today, July 22, 2022

Wheat, Corn Drop Overnight; Beef Production in June Rises to Record

1. Wheat, Corn Fall Overnight on Ukraine Grain Deal

Wheat and corn futures were lower in overnight trading as a deal has reportedly been reached to move Ukraine grains to overseas buyers, and after a disappointing U.S. export sales report.

A deal reportedly has been reached with Russia that will allow grain from Ukraine to move through the Black Sea, according to several media reports. The BBC reported that it will be signed today by officials from Ukraine, Russia and Turkey and United Nations Secretary-General Antonio Guterres.

Grain shipments from Ukraine have been drastically reduced since Russian forces began attacking the country in February.

Sales of U.S. wheat to overseas buyers fell 50% in the seven days that ended on July 14 to 511,100 metric tons, the Department of Agriculture said in a report. That's also down 10% from the prior four-week average.

The Philippines bought 110,100 metric tons, an unnamed country took 107,000 tons, Mexico purchased 50,700 tons and Taiwan was in for 44,700 tons. The total would've been higher but Egypt, South Korea and Honduras all canceled orders.

Corn sales dropped 43% week-to-week to 33,900 metric tons, which is down 82% from the average, the USDA said.

Japan purchased 87,300 metric tons from U.S. supplies, Mexico bought 38,800 tons, Venezuela was in for 10,200 tons, El Salvador took 2,000 tons and South Korea was in for 1,400 tons. An unnamed country canceled shipments of 94,600 metric tons, the agency said.

Soybean sales totaled 203,500 metric tons, rebounding from a net-reduction in sales a week earlier. China bought 146,900 tons, Indonesia was in for 72,200 tons, Germany took 68,800 tons, Japan purchased 55,100 tons and Mexico bought 13,200 tons.

The total would've been higher but an unknown destination canceled cargoes totaling 172,900 tons, the USDA said.

Prices also may be lower overnight as rainfall is expected in parts of the central U.S. this weekend and next week.

"Clusters of thunderstorms increasingly scatter from the Plains into the Midwest starting tonight and continuing through next week," Commodity Weather Group said in a report. Some weather models are showing some dry weather in the Midwest in the next one to five days, but model support is strong for precipitation.

Temperatures also are forecast to moderate next week after the heat wave that's hovering over the central Corn Belt moves on, the forecaster said.  

Wheat for September delivery lost 29¢ to $7.77 ¼ a bushel overnight on the Chicago Board of Trade while Kansas City futures dropped 25 1/2¢ to $8.35 ¾ a bushel.

Corn futures for December delivery fell 6¢ to $5.67 ½ a bushel.

Soybean futures for November delivery were down 5 1/4¢ to $12.96 ¼ a bushel. Soymeal declined $3.10 to $382.10 a short ton, while soybean oil futures rose 0.21¢ to 56.27¢ a pound.

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2. Beef Output Jumps to Record, Pork Production Up Modestly in June

Beef production jumped to a record in June as overall commercial red-meat output increased, according to a report from the U.S. Ag Department.

Beef output last month rose to 2.45 billion pounds, a 2% increase year-over-year the USDA said. Production in May was reported at 2.29 billion pounds

About 3.04 million head of cattle were slaughtered, up 3% from the same month in 2021, though live weights were down about 7 pounds at 1,339 pounds, the agency said.

Pork production rose modestly from the previous year to 2.26 billion pounds in June. Output in May totaled 2.18 billion pounds. Hog slaughter fell 1% to 10.5 million head, and average light weights were up four pounds to 288 pounds.

Commercial red-meat production last month totaled 4.72 billion pounds, up 1% from the same month last year, the USDA said. In May, output was reported at 4.48 billion pounds.

In the first six months of 2022, however, red-meat output fell 1% year-over-year to 27.7 billion pounds.

Beef production from January through June rose 2% from the same timeframe a year earlier, while pork output fell 3%, the agency said in its report.

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3. Heat Advisories Back in Central Corn Belt

Heat advisories are back this afternoon from northwestern Colorado east into southern Indiana and south into northern Louisiana, according to the National Weather Service.

Heat indexes in central Nebraska are forecast to hit 110 degrees Fahrenheit this afternoon, the NWS said in a report early this morning, the agency said.

In southern Iowa, values will top out at about 105 degrees. Heat indexes in central Missouri will range from 100 to 109 degrees.

Red-flag warnings have been issued in parts of western South Dakota and eastern Wyoming amid extremely dry weather, the NWS said.

Winds will be sustained from 15 to 25 miles an hour with gusts of up to 30 miles an hour, and relative humidity will drop as low as 11%, the agency said.

Rain may fall over the weekend in parts of central Iowa.

"Strong to severe thunderstorms are forecast later Saturday afternoon into Saturday night," the NWS said. "The highest severe risk is over northern Iowa with the main hazards expected being damaging wind gusts and large hail."  

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