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3 Big Things Today, July 5, 2022

Trade to follow latest weather maps; Heat builds across nation's midsection

1. Direction of trade to follow latest weather maps

Grain markets were closed yesterday in observance of the Fourth of July holiday. Trade will resume at 8:30 a.m. CT this morning.

On Friday, U.S. grain prices ended the day lower across the board with August soybeans dipping 50 3/4 cents and November soybeans down 62 3/4 cents. 

"Last week was another rough week of trading for U.S. grain prices. Fund selling was the major topic, continuing all week long," says Cory Bratland, chief grain strategist, Kluis Commodity Advisors. "The next 10-day weather forecast looks to be non-threatening, but from July 10 to 20, there are some models predicting a warmer and drier pattern. We are very much into a weather market, so look for the direction of trade this week to be based off of the latest weather maps."

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2. Argentina’s farm leaders concerned about new economy minister

The naming of an economy minister with close ties to a leader who pushed higher export taxes on agricultural goods when she was president has Argentina’s farm sector leaders worried. Martin Guzman, the country’s most recent economy minister, resigned on Saturday, as Argentina struggles with inflation and massive debt obligations.

On Sunday, President Alberto Fernandez named Silvina Batakis to replace Guzman. Batakis previously served as the minister of economy in Buenos Aires from 2011 to 2015. She is viewed as having a similar stance for more public spending and other intervening economic policies as Cristina Fernandez de Kirchner, who served as Argentina’s president from 2007 to 2015.

Currently, export taxes on corn and wheat are at 12%, and the government has left open the possibility of raising them further after it increased export taxes on soybean oil and meal from 31% to 33% earlier this year.

Argentina's closely watched black market peso weakened on Monday to around 267 per U.S. dollar, more than double the controlled official exchange rate, while equities and bonds, already in distressed territory, lost more ground.

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3. Heat builds across the nation’s midsection

A combination of high temperatures and high humidity are pushing heat indices to a sweltering 105 to 110 degrees Fahrenheit in the southeast Missouri Valley to the middle Mississippi Valley and mid-South. Widespread heat advisories are in effect in some places until Wednesday. Record highs are also forecast from the Southern Plains to the Southern Appalachians. With morning lows hovering in the mid-70s to near 80, little relief is expected in the overnight hours. 

A low-pressure system is expected to move across the Great Lakes to the East Coast today with two trailing air masses remaining across the Midwest, Central Plains, and Northern High Plains, which will lead to showers and thunderstorms by mid-week.

Locations likely to see an excessive amount of rainfall and severe weather in the coming days include the Midwest, the Ohio Valley and portions of the Mid-Atlantic states and Carolinas, according to the National Weather Service.

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