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3 Big Things Today, May 11, 2022

Wheat Futures Surge Overnight; April Tractor Sales Fall Year-Over-Year.

1. Wheat Futures Surge in Overnight Trading

Wheat surged on persistent dry weather in the U.S. southern Plains while corn and beans rose as planting remains slow in some areas.

Red-flag warnings again have been issued in parts of the southern Plains today and tomorrow amid high temperatures, strong winds, and low relative humidity.

Little or no rain has fallen in much of western Kansas or the Oklahoma and Texas panhandles in the past week, according to the National Weather Service’s precipitation page.

It’s the opposite problem in the northern Plains where spring wheat is grown as excessive precipitation continues to delay planting.

As much as six times the normal amount of rain has fallen in much of North Dakota and South Dakota, the NWS maps show. About 27% of the U.S. spring-wheat crop was sown as of Sunday, well behind the prior five-year average of 47%, the U.S. Department of Agriculture said in a report.

Some 9% had emerged as of the start of the week, down from the normal 15% for this time of year, the USDA said.

Corn and soybean planting also trailed the average pace due to recent rainfall.

About 22% of U.S. corn was in the ground, behind the average of 50%, the agency said; 5% had emerged as of Sunday, behind the normal pace of 15%, the government said.

Only 12% of soybeans were planted, down from the average of 24%, and 3% had emerged, behind the normal 4%, the USDA said in its report.

The weather in much of the Midwest has been much more favorable for planting this week, though rainfall in the northern Corn Belt continues to keep farmers out of their fields.  

Wheat for May delivery jumped 19½¢ to $11.12¼ a bushel overnight on the Chicago Board of Trade while Kansas City futures added 17¢ to $11.92 a bushel.

Corn futures were up 7¾¢ to $7.83 a bushel.

Soybean futures for July delivery gained 11¾¢ to $16.04 a bushel. Soymeal rose $1.80 to $403.30 a short ton, while soybean oil futures surged 1.44¢ to 82.48¢ a pound.

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2. Tractor and Combine Sales Decline For Second Month

Tractor and combine sales fell for a second straight month in April amid supply chain difficulties, according to the Association of Equipment Manufacturers.

Sales of farm tractors dropped 22% year-over-year last month to 31,587 units, the AEM said in a report.

Two-wheel-drive tractor sales also fell 22% to 31,329 units. Sales of tractors under 40 hp. lost 25% to 22,714 units and sales of those between 40 and 100 horses plunged almost 20% to 6,261 units.

Sales of machines with 100 or more hp. bucked the trend, rising 3.2% year-over-year to 2,354 units last month, the association said.

Four-wheel-drive tractor sales fell 21% to 258 units, while sales of self-propelled combines declined 5.6% to 459 units.

“Supply chain remains the No. 1 difficulty our member manufacturers are facing,” said Curt Blades, the senior vice president for industry sectors and product leadership at the AEM.

Still, the numbers are being compared with record sales in 2021, he said.

“While these numbers may look disappointing, they remain above the five-year average,” Blades said in a statement.

Canadian sales didn’t fare much better, falling 19% from April 2021 to 2,992 units, the AEM said.

Two-wheel-drive sales fell 17% as sales of units under 40 hp. dropped 21%, sales of 40 to 100 horses declined 12%, and sales of 100-plus-horsepower units were down 6.5% year-over-year.

Four-wheel-drive sales in Canada plunged 49%, and self-propelled combine sales lost 14% from the previous year, the AEM said in its report.

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3. Dry Weather Continues in Parts of the U.S. Southern Plains

More dry weather is in store for the southern Plains today as red-flag warnings have again been issued, according to the National Weather Service.

In eastern Colorado and a few counties in western Kansas, a red-flag warning, which indicates dangerously dry weather, will be in effect from 10 a.m. through 10 p.m. local time today and tomorrow from 9 a.m. through 10 p.m., the NWS said in a report early this morning.

Winds will be sustained from 20 to 30 mph with gusts of up to 50 mph. Relative humidity will drop as low as 2% with the lowest values likely on Thursday.

“Dry lightning may occur in the far eastern fire-weather zones late this afternoon and early evening,” increasing the risk of wildfires, the NWS said. “Conditions will be favorable for rapid rates of fire growing and spread.”

In northern Wisconsin, meanwhile, thunderstorms are expected this afternoon into tomorrow, bringing strong winds and large hail, the agency said.

Flooding is expected along some waterways in northern Minnesota, and minor flooding is forecast for the region, the NWS said.

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