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3 Big Things Today, November 12, 2020

Wheat Futures Lower Overnight; Brazil Expects Record Soybean, Corn Crops.

1. Wheat Futures Lower Overnight on Potential Russian Exports

Wheat futures were lower in overnight trading on speculation Russia will export more of the grain than originally anticipated.

Russia, in a government draft proposal, set its grain export quota from mid-February through the end of June at 15 million metric tons, less stringent than forecast, which means it could ship more than the market was expecting.

The country uses quotas to limit shipments in a bid to protect its domestic supplies.

Russia is expected by the U.S. Department of Agriculture to ship 39.5 million metric tons of wheat in the 2020-2021 marketing year that started on June 1.

If realized, that would make the nation the world’s largest exporter of the grain. By comparison, the U.S. is forecast by the USDA to export 26.5 million metric tons of wheat, which would make it the second-biggest shipper of the grain.

Still, U.S. export sales have been robust this year.

Overseas buyers have committed to purchase 16.9 million metric tons of U.S. wheat since the start of June, up 12% from the same period last year, according to the USDA.  

Wheat futures for December delivery fell 3½¢ at $5.94½ a bushel overnight on the Chicago Board of Trade while Kansas City futures lost 3¾¢ to $5.50½ a bushel.

Soybean futures for January delivery fell ½¢ to $11.52 a bushel. Soymeal was up 20¢ to $392.90 a short ton, and soy oil declined 0.04¢ to 37.09¢ a pound.

Corn futures for December delivery lost 1¢ to $4.15¾ a bushel.

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2. Brazil Soybean and Corn Production Expected by CONAB to Reach Records

Brazilian soybean and corn production in the marketing year that started on Sept. 1 are expected to reach a record high, according to a report from Companhia Nacional de Abastecimento, or CONAB, the national agriculture department.

The agency said in its second survey of the 2020-2021 harvest that it now pegs bean output at 135 million metric tons. Planted area is seen at 38.2 million hectares (94.4 million acres).

Corn production is expected at 104.9 million metric tons on harvested area of 18.4 million hectares.

“The new estimate considers the recovery of the productivity of soybean and maize crops,” CONAB said in its report. “Both were severely affected by the drought in 2019, especially in Rio Grande do Sul. Despite the delay in rains this year, producers accelerated the pace and, until last Friday, planting reached 55% of the estimated area, against 56% in the same period of the previous harvest.”

The U.S. Department of Agriculture in its monthly World Agricultural Supply and Demand Estimates report yesterday forecast Brazilian soybean production at 133 million metric tons and corn output at 110 million metric tons.

Brazil’s wheat harvest is about 80% complete with production estimated at 6.4 million metric tons on 2.3 million hectares, the agency said.

The USDA has pegged wheat output in the South American country at 6.6 million metric tons.

Soybean exports are expected to be around 82.7 million metric tons this year, CONAB said. That’s down from the USDA outlook for 85 million tons.

Corn exports are seen at 34.5 million metric tons, the agency said, vs. the U.S. government’s prediction of 39 million tons.

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3. `Intense’ Band of Snow Expected in Parts of South Dakota, Iowa, and Minnesota

A “rather intense band of snow” is forecast for parts of eastern South Dakota, northwestern Iowa and southwestern Minnesota today, according to the National Weather Service.

“With this band of snow, visibility may be reduced as low as .5 mile for a period,” the NWS said in a report early this morning.

Most areas will only receive about an inch of snow but a narrow corridor could see up to 4 inches, the agency said.

The storm will move quickly and be heavy for a brief period of time.

Farther south, thunderstorms are expected in parts of eastern Oklahoma and western Arkansas starting tomorrow.

“A strong upper level disturbance will move into the region late Friday into Saturday,” the NWS said. “Areas of rain, with a few embedded thunderstorms, will likely become more widespread across northeast Oklahoma Friday night.”

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