3 Big Things Today, July 29, 2020
1. Wheat Futures Higher in Overnight Trading
Wheat futures were higher in overnight trading on technical buying and weather forecasts that show potential stress on global crops.
Prices are rebounding after yesterday’s decline as bargain hunters jump into the market.
Commodity Weather Group said in its seasonal outlook this week that several growing areas in the world are facing potentially adverse weather later this year.
Moisture is now adequate in parts of Australia, but probably will wane heading into August, CWG said. That could become a problem from August through October, which is critical because jointing starts in August and heading begins in September, the forecaster said.
Dry weather also may hurt wheat establishment in the western two-thirds of Europe, CWG said.
In the northern Plains, meanwhile, no rain is in the forecast for at least the next couple of days in spring wheat country. A small part of south-central North Dakota – the biggest state producer of spring wheat – is facing a “moderate drought,” according to the U.S. Drought Monitor.
Wheat futures for September delivery rose 6¾¢ to $5.30¼ a bushel overnight on the Chicago Board of Trade while Kansas City futures added 6¢ to $4.42¾ a bushel.
Soybean futures for December delivery fell ½¢ to $8.87 a bushel. Soymeal fell $1.30 to $296.20 a short ton, and soy oil gained 0.27¢ to 30.19¢ a pound.
Corn futures for December delivery were unchanged at $3.30 a bushel.**
2. China Likely to Rely on Brazil For Bulk of Soybean Imports
China has been buying a large amount of U.S. agricultural products in recent weeks including a purchase of 132,000 metric tons of soybeans that was reported on Monday.
Last week alone, the USDA reported sales of more than 1.1 million metric tons of soybeans to the Asian nation.
China in June purchased a record 11.2 million tons of soybeans from global sources, including 10.5 million tons from Brazil, Reuters reported, citing Chinese customs data. Only 267,553 tons of the overall total was from the U.S.
Certainly July’s numbers will look better, but it looks as if the bulk of China’s soybean purchases will be from Brazil for some time, Commerzbank analysts said in a note to clients.
Brazil’s acreage is expected to expand by almost 4% to the highest level in six years, analyst Michaela Helbing-Kuhl said.
“Brazil looks set to remain the country’s main supplier, however, and is profiting from the U.S.-Chinese trade dispute,” she said.
China is expected to import 96 million metric tons of soybeans in the 2020-2021 year that starts on Sept. 1, according to the USDA.
3. Rain Expected in Midwest as Flood Watches Continue in Oklahoma
Rainfall is expected in parts of the U.S. Midwest today and tonight, according to the National Weather Service, which likely will give maturing crops a boost.
Showers are expected in much of northern Illinois and Indiana this afternoon along the interstates 80 and 88 corridors, the NWS said in a report early this morning.
Some gusty winds will accompany the rainfall, the agency said.
More flooding is expected in central and eastern Oklahoma and western Arkansas today as round after round of rain hit the region.
The area is under flood watches and advisories for now, the NWS said. Most areas will see about an inch or two of rain today and tonight, but some will get up to 6 inches of precipitation.
“Scattered thunderstorms, with locally heavy rain, will spread east across the region today,” the agency said. “Additional thunderstorms are expected to redevelop tonight, especially across northeast Oklahoma. Given the high rain rates and slow storm motions expected, localized flash flooding is likely. Most areas will see around an inch or two of rain.”