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3 Big Things Today, May 22, 2020

Crop Futures Decline Overnight; Weekly Export Sales of Soybeans Jump.

1. Grain and Soybean Futures Decline in Overnight Trading

Grain and soybean futures were lower in overnight trading as tensions between the U.S. and China again ramp up.

Members of the Trump administration have accused China of withholding information about the early days of the COVID-19 virus, before it reached pandemic levels.

China said it plans to tighten control in Hong Kong that likely would curtail freedoms under the guise of national security.

Amid the backdrop of already-escalating tensions, President Donald Trump said the U.S. would react “very strongly” if China moved forward with those plans.

Despite reports that the U.S. was considering backing out of a trade deal signed with China earlier this year, National Economic Council Director Larry Kudlow said the agreement was still intact. China said it also plans to implement the first phase of the trade deal, which includes purchases of U.S. agricultural products.

In other news, participants on the Wheat Quality Council’s annual Kansas wheat tour said they expect the state’s crop at 284.4 million bushels, down sharply from the previous year’s 338 million bushels.

Yield was pegged at 44.5 bushels an acre and area was seen at 6.4 million acres, which compares with 47 bushels an acre and 6.5 million acres last year.

Corn futures for July delivery fell 1¼¢ to $3.16½ a bushel overnight on the Chicago Board of Trade.

Wheat futures lost 7¼¢ to $5.08¾ a bushel, and Kansas City futures fell 4½¢ to $4.50 a bushel.

Soybean futures declined 3¼¢ to $8.31¾ a bushel overnight, while soymeal lost 10¢ to $282.40 a short ton and soy oil dropped 0.32¢ to 26.79¢ a pound. 

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2. Weekly Export Sales of Beans Jump While Corn and Wheat Decline

Export sales for soybeans jumped week-to-week while grains sales declined, according to the U.S. Department of Agriculture.

Soybean sales to overseas buyers in the seven days that ended on May 14 came in at 1.21 million metric tons, almost double the previous week’s total and up 80% from the prior four-week average.

China was the big buyer at 737,400 metric tons, followed by an unnamed country at 177,700 tons and Egypt at 89,300 tons, the agency said. Italy bought 38,600 metric tons, and Canada purchased 28,800 tons.

For the 2020-2021 marketing year that starts on Sept. 1, exporters sold 464,000 metric tons including 462,000 tons to China and the remainder to Taiwan, the USDA said.

Analysts expected total sales from 800,000 to 1.6 million metric tons, according to researcher Allendale.

Corn sales last week came in at 884,200 metric tons, down 18% from the previous week and 10% from the average, the government said.

Japan was the top buyer for the week at 332,600 metric tons, followed by Mexico at 215,000 tons and South Korea at 133,000 tons. Peru purchased 64,000 metric tons and the Dominican Republic took 35,000 tons.

For 2020-2021, there was a net reduction of 29,4000 metric tons after Mexico canceled shipments totaling 34,500 tons, more than offsetting small purchases from Honduras, Canada, and Guatemala, the USDA said.

Analysts had pegged corn sales from 700,000 to 1.4 million metric tons.

Wheat sales also fell, dropping 14% from the prior week and 39% from the average, the agency said.

The Philippines bought 59,000 metric tons of U.S. wheat, South Korea was in for 37,700 tons, and an unknown buyer took 31,200 tons. Italy purchased 20,900 tons and Mexico took 17,700 tons.

For the 2020-2021 marketing year that starts on June 1, sales were reported at 252,400 metric tons as an unnamed country bought 128,000 tons from U.S. supplies. The Philippines took 50,000 tons, Mexico was in for 42,200 tons, the Dominican Republic purchased 9,800 tons, and Chile bought 7,500 tons, the USDA said.

Analysts had expected wheat sales from 200,000 to 650,000 metric tons.

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3. Strong Thunderstorms Passing Through Central Oklahoma This Morning

A severe thunderstorm warning has been issued for parts of central Oklahoma while severe thunderstorm watches are in effect in much of the rest of the state, according to the National Weather Service.

Several counties surrounding the Stillwater area are being hit by a severe storm that’s bringing winds topping 60 mph and quarter-size hail, the NWS said in a report just before 5:45 a.m. local time.

“Hail damage is expected,” the agency said. “Expect wind damage to roofs, siding, and trees.”

The severe thunderstorm watch includes 18 counties in the state. NWS radar also shows the storm is reaching up into central Kansas this morning, where the storm is slowly moving east.

Farther north, there’s a chance of thunderstorms in parts of eastern Iowa and western Illinois starting tonight.

While severe weather isn’t expected in the region, some areas may see small hail and gusty winds, the NWS said. More storms are possible tomorrow afternoon and evening.

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