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3 Big Things Today, June 10, 2020
1. Wheat Futures Higher Overnight, While Corn, Beans Are Mixed
Wheat futures rose in overnight trading on speculation that adverse weather in the U.S. may hurt crops.
Strong winds with gusts from 60 to 100 mph in eastern Colorado and southwestern Nebraska may have caused some losses in areas where hard red winter wheat is still growing, Commodity Weather Group said in a report.
Only 7% of the winter wheat crop in the U.S. was harvested as of Sunday, on par with the prior five-year average, the USDA said in a report this week.
In the Northern Plains where spring wheat is growing, there’s a risk of drier weather in the 16- to 30-day outlook, CWG said.
Still, price gains will be capped amid ample global supply. World output in the marketing year that started on June 1 is pegged by the USDA at 768.5 million metric tons, up from 764.3 million tons a year earlier.
That will drive inventories to 310.1 million metric tons from 295.1 million, the agency said.
Wheat futures for July delivery rose 3½¢ to $5.08 a bushel overnight on the Chicago Board of Trade, while Kansas City futures jumped 5¾¢ to $4.63½ a bushel.
Corn futures were down 1¢ to $3.26½ a bushel overnight.
Soybean futures rose 3½¢ to $8.66¾ a bushel. Soy meal futures gained $1.10 to $288.20 a short ton, and soy oil dropped 0.01¢ to 28.22¢ a pound.
2. Australia Raises Wheat Production Outlook by 25% as Rain Falls in Crop-Growing Areas
The Australia Bureau of Agricultural Resource Economics and Science (ABARES) on Wednesday bumped its production outlook to 26.7 million metric tons, a 25% increase from the month-earlier estimate.
Heavy rainfall that’s broken a years-long drought in eastern growing regions of the country is giving crops in the country a boost.
“The rainfall has now brought considerable relief, allowed crops to be sown on a larger acreage than initially expected, and is likely to improve yields significantly,” Commerzbank analysts said in a report. “Crops have been down in the past three years. The latest crop was only just under half as high as the (2016-2017) record figure of around 32 million tons.”
The area planted to wheat is expected to jump b 27% to almost 13 million hectares (32.1 million acres), which is 8% above the 10-year average, ABARES said in its report.
The Australian Bureau of Meteorology said last week it expects rainfall to be above average in most crop-growing regions of Queensland and New South Wales and about average in other areas.
The USDA said in a May report that it expects Australia to produce 24 million metric tons of wheat in the 2020-2021 marketing year that started on June 1, but it may revise its estimate higher in tomorrow’s World Agricultural Supply and Demand Estimates Report.
Australia last year exported only 8.2 million metric tons of wheat, but that could almost double to 15 million metric tons this year, USDA data show.
3. Flood Watches and Warnings Issued in Parts of Central Iowa
Flood watches and warnings are in effect in much of central Iowa this morning, as up to 3 inches of rain are forecast in some areas, according to the National Weather Service.
Most areas will see about 1½ inches of rain. Flash flooding is likely in some low-lying or poor-drainage areas, the NWS said in a report early this morning.
The rain follows the 2 to 5 inches that fell yesterday in the area.
A wind advisory also has been issued for parts of western Iowa, eastern Nebraska, eastern Kansas, western Missouri, and northeastern Oklahoma.
Along the Kansas-Missouri border, winds will be sustained from 20 to 30 mph today while gusts of up to 45 mph are expected, the agency said.
“Gusty winds could blow around unsecured objects,” the NWS said. “Tree limbs could be blown down, and a few power outages may result.”