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3 Big Things Today, November 2, 2022

Wheat, Corn Plunge Overnight; Russia Agrees to Again Allow Grain Shipments

1. Wheat, Corn Drop on Resumption of Ukraine Grain Deal

Wheat and corn futures plunged in overnight trading after Russia agreed to resume the trade agreement that allows shipments of agricultural products from Ukraine.

The news comes just days after the Russian government suspended the deal — called the Black Sea Grain Initiative — saying it could no longer guarantee the safety of civilian vessels making their way through corridors.

Ukraine reportedly sent written guarantees to Russia saying it would only use the corridor for ag shipments, despite previously saying it wouldn't use the shipping lanes for military operations, Bloomberg reported.

Shipments through the corridor will resume today, said Turkish President Recep Tayyip Erdogan. Still, the United Nations said in a statement on Tuesday that shipments would be suspended on Wednesday.

Two vessels — one from Chornomorsk bound for Libya carrying 22,800 metric tons of wheat and one from Yuzhny/Pivdennyi headed to Morocco carrying 12,690 tons of sunflower meal — left Ukrainian ports yesterday as part of the program.

Roughly 470 ships have sailed from ports in Ukraine since the initiative took effect on Aug. 1.

Wheat futures for December delivery dropped 53¾¢ to $8.48 ¾ a bushel overnight on the Chicago Board of Trade, while Kansas City futures declined 42¢ to $9.48 a bushel.

Corn for December delivery plunged 17¢ to $6.80 ¾ a bushel.

Soybean futures, meanwhile, were higher in overnight trading on concerns about South American weather.

Soybean futures for January delivery added 13½¢ to $14.33 a bushel. Soymeal dropped $3.90 to $420.90 a short ton, while soybean oil lost 0.52¢ to 72.85¢ a pound.

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2. Grain Shipments From Ukraine to Continue After Russia Agrees

The Black Sea Grain Initiative, the agreement allowing Ukraine grain to ship from ports along the waterway, will resume after Russia agreed to allow ships through a protected corridor just days after suspending the deal.

The agreement was originally brokered by the United Nations and Turkey in late July and implemented at the beginning of August. Turkey facilitated the resumption of the deal after Russia on Saturday suspended participation.

From Aug. 1 through Oct. 30, more than 9.5 million metric tons of grain and food products moved through ports in Ukraine under the initiative, United Nations data show.

"I welcome the return of the Russian Federation to the implementation of the Black Sea Grain Initiative to facilitate exports of food and fertilizer from Ukraine," Amir Abdulla, the UN's coordinator for the Black Sea Grain Initiative, said in a tweet. "Grateful for the Turkish facilitation. Looking forward to working again with all parties in the Initiative."

The UN yesterday said no ships would sail under the plan out of Ukrainian ports, even after 36 inspections on outbound vessels.

Teams boarded two more ships but the inspection process was suspended due to events not related to the Russian suspension or resumption of the program, the organization said.

In its statement prior to the announcement that Russia would resume its participation, the UN called the suspension of the initiative "a temporary and extraordinary measure."

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3. Dry Weather Leads to Warnings in Parts of Kansas, Colorado

Extremely dry weather has settled over parts of several states including Colorado and Kansas where hard-red winter wheat is growing, according to maps from the National Weather Service.

Red-flag warnings have been issued for western Kansas and eastern Colorado, NWS said in a report early this morning.

Winds will be sustained from 20 to 25 mph with gusts of up to 35 mph expected. Relative humidity in the area will drop as low as 15%, the agency said.

Red-flag warnings also have been issued for parts of North Dakota, almost all of South Dakota, and western Nebraska.

In western South Dakota winds will gust up to 40 mph and humidity will drop to 11%, NWS said, creating tinderbox-like conditions.

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