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3 Big Things Today, October 31

Wheat Futures Decline Overnight; Dollar Value Hits Highest in 16 Months.

1. Wheat Lower Overnight on Slack Demand, Profit Taking

Wheat futures slid overnight in Chicago on signs of slack demand for U.S. supplies, even after Egypt made a purchase earlier this week.

Egypt on Monday said it bought 60,000 metric tons of the grain from the U.S., which has become a rarity. While that helped drive prices higher the past two days, the purchase was part of a 470,000-ton buy with most coming from Russia.

U.S. sales of wheat are down 17% year over year since the start of the grain’s marketing year on June 1, according to the USDA.

The price also may be falling as investors who were long the market, or had bet on higher prices, booked profits after futures hit a 10-day high with the Egypt purchase being the only bullish news.

Corn and soybeans were little changed.

Wheat for December delivery fell 4¼¢ to $4.95½ a bushel overnight on the Chicago Board of Trade, while Kansas City futures declined 3¾¢ to $4.90¾ a bushel.

Corn futures lost a penny to $3.63¾ a bushel overnight.

Soybeans for November delivery rose ½¢ to $8.47½ a bushel in Chicago. Soy meal futures were unchanged at $305.10 a short ton, and soy oil fell 0.05¢ to 27.95¢ a pound.

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2. Dollar Hits Highest in 16 Months, Makes U.S. Goods More Expensive Globally

The value of the U.S. dollar jumped to the highest in 16 months against major global currencies due to the strong economy, but that’s not good news for exports of dollar-denominated goods including agricultural products.

The dollar rose to its highest level since June 2017 overnight. That reduces demand as it curbs purchasing power of U.S. items for overseas buyers.

Soybean sales and inspections have been dismal since the start of the oilseed’s marketing year on September 1, as have those for wheat since the start of the grain’s year on June 1. Corn has been the outlier as buyers have been snapping up supplies from the U.S.

Commitments from overseas buyers to purchase soybeans are down 26% year over year and while advance sales of wheat have dropped 17%, according to the USDA. Corn sales, meanwhile, are up 32%.

Actual shipments of soybeans are down 35% on an annual basis, and wheat cargoes have dropped 22%. Corn exports, however, are up 83% year over year, the USDA said.

The dollar has been strengthening amid strong economic indicators in the U.S. including low unemployment, rising consumer confidence and increasing personal income. The greenback also has been strengthening as its counterparts including the euro and pound, which hit a 10-week low amid Brexit concerns, have been declining.

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3. Flood Watch in Effect From Missouri Through Ohio as Rains on the Way

A flood watch is in effect for a patch of land stretching from the bootheel of Missouri through north-central Ohio, as excessive rain is expected to fall today and tonight, according to the National Weather Service.

“Locally heavy rain will be possible tonight as a slow-moving cold front enters the area,” the NWS said in a report early Wednesday morning. “Nuisance flooding of low-lying areas is likely.”

The western half of Kentucky is included in the flood watch.  

In the Southern Plains, meanwhile, a storm bringing extremely cold weather and snow is moving east out of the Rockies. A winter storm warning is in effect for parts of New Mexico and one county in the Oklahoma panhandle.

That storm is expected to move east in the next couple of days, though it’s unclear how much snow will make it into southwestern Kansas and the Oklahoma and Texas panhandles at this point.

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