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3 Big Things Today, July 8, 2020
1. Soybeans, Corn Fall on China Tensions, COVID Spread
Soybeans and corn were lower in overnight trading on concerns about demand due to rising tensions with China and concerns about the resurgence of the COVID-19 pandemic.
The Trump administration imposed a travel ban on some Chinese officials that it said are restricting access to Tibet. China, in turn, said it will impose restrictions on Americans, though Beijing didn’t specify who would be restricted.
Secretary of State Mike Pompeo said Monday that the U.S. may consider banning the video-sharing platform TikTok, which is a popular app created by Chinese multinational ByteDance.
The U.S. and China have already been at odds over the handling of the initial COVID-19 outbreak in the Asian nation, and over tensions in Hong Kong. The sparring over Tibet issues and the Chinese app likely won’t help trade relations.
The resurgence of the COVID-19 virus in several parts of the world has some investors on edge about global food demand.
More than 130,000 people in the U.S. have died from the virus so far, with another 2.8 million infected, according to the Centers for Disease Control and Prevention. Globally, 544,536 people have died and 11.8 million are confirmed to have the disease, according to Johns Hopkins University.
Restrictions on bars and restaurants have gone back into place as the number of cases and hospitalizations jump in some states including Florida and Texas, and parts of Australia have reissued lockdown measures to prevent the spread of the virus.
Soybean futures for December delivery dropped 4½¢ to $8.98 a bushel overnight on the Chicago Board of Trade. Soymeal fell $1.40 to $301.70 a short ton, and soy oil lost 0.07¢ to 29.49¢ a pound.
Corn futures for December delivery lost 3¼¢ to $3.49¼ a bushel overnight.
Wheat rose 2¾¢ to $4.98 a bushel while Kansas City futures added 3¼¢ to $4.44 a bushel.**
2. Hot Weather Coming at Especially Bad Time For Silking Corn Crop
Hot weather in the summer isn’t anything new, but another round of heat expected for at least the next week may be coming at an especially bad time.
Parts of the upper Midwest are in for another round of extremely hot weather starting today as temperatures are expected to top out around 105°F.
Much of the southern Plains and Midwest are at a high risk of excessive heat next week, according to the National Weather Service’s Climate Prediction Center.
The agency said in a report yesterday that there’s typically a “Southwest monsoon” in early July, which likely will be delayed this year.
That, along with extremely high temperatures, may mean “drought is also likely to expand across parts of the Great Plains and Corn Belt, where 30- to 60-day precipitation deficits currently exist and insufficient rainfall occurs during the next two weeks,” the NWS said.
A heat wave comes at a particularly bad time as much of the U.S. corn crop is entering the critical silking stage.
About 10% of the crop was silking as of July 5, the USDA said on Monday. That’s behind the normal 16% for this time of the year.
In Iowa, only 5% was silking at the start of the week, behind the prior five-year average of 8%, and in Illinois 10% had reached that stage, behind the average of 28%, the agency said. Iowa and Illinois are the biggest producers of corn.
Extremely hot weather just as corn hits the silking stage could stunt growth and ultimately reduce production.
3. Excessive Heat Warnings and Advisories Issued For Large Part of Upper Midwest
An excessive heat warning has been issued starting at 11 a.m. in parts of eastern Minnesota while the eastern two-thirds of Iowa along with some counties in Wisconsin and Illinois are under heat advisories, according to the NWS.
Heat indexes in eastern Minnesota are forecast around 103°F. today, the agency said in a report early this morning.
“Extreme heat and humidity will significantly increase the potential for heat-related illnesses, particularly for those working or participating in outdoor activities,” the NWS said.
In eastern Iowa and western Illinois, heat indexes are expected to hit around 105°F. today.
Temperatures in northern Indiana, southern Michigan, and parts of Ohio are expected to be around 100°F. today but may climb to about 102°F. on Thursday, the agency said.