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3 Big Things Today, October 7, 2022

Wheat Futures Surge in Overnight Trading; Export Sales Down Across the Board

1. Wheat Futures Jump in Overnight Trading

Wheat futures surged in overnight trading as drought spreads in the southern Plains and as speculative investors buy back contracts after prices plunged yesterday.

Corn and soybeans were little changed.

In Kansas, the biggest producer of winter wheat, about 85.1% of the state was suffering from drought conditions, according to the U.S. Drought Monitor. That's up from 82.6% a week earlier, and 44% three months ago.

Almost all of Oklahoma, the second-largest winter-wheat producer in the U.S., was seeing drought conditions, unchanged from a week earlier, but up from only 31% three months prior, the monitor said.

Drought's also spreading in parts of the Midwest.

About 25% of a nine-state region that includes Iowa, Illinois, and Missouri is now suffering from drought, up from 20% a week earlier and 15% three months ago, the Drought Monitor said.

Wheat prices also may be rising as hedge funds and other large investment houses buy back futures contracts after they fell double digits yesterday on concerns about the macro economy. Export sales were disappointing with wheat, corn and soybean all seeing declines.  

Wheat futures for December delivery jumped 13¢ to $8.92 a bushel overnight on the Chicago Board of Trade, while Kansas City futures surged 14 ½¢ to $9.79 ½ a bushel.

Corn futures for December delivery were up 2¢ to $6.77 ½ a bushel.

Soybean futures for November delivery added 1 ¾¢ to $13.59 ¾ a bushel. Soymeal gained $1 to $394.40 a short ton, while soybean oil rose 14¢ to $66.16 a pound.

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2. Sales of Soybeans and Grains to Overseas Buyers Decline Week-to-Week

Export sales of soybeans and grains were all lower in the seven days that ended on Sept. 29 compared with the previous week, according to data from the USDA.

Soybean sales last week were reported at 777,100 metric tons, down from the 1 million tons sold a week earlier, the agency said.

Mexico was the big buyer at 233,400 metric tons, China purchased 157,100 tons, the Netherlands took 150,100 tons, Taiwan was in for 57,800 tons, and Spain bought 57,200 tons.

Exports for the week came in at 617,500 metric tons, up from 269,200 tons a week earlier.

Corn sales totaled 227,000 metric tons, down from 512,000 tons, the USDA said.

Mexico purchased 147,300 metric tons, Honduras was in for 28,200 tons, Guatemala bought 20,800 tons, China took 14,200 tons, and Costa Rica bought 11,100 tons.

Exports of the grain were reported at 645,500 tons, up from 574,700 tons the previous week, the government said.

Wheat sales last week came in at 229,400 metric tons, down from 279,800 tons.

The Philippines bought 85,300 tons, Taiwan took 51,800 tons, Nigeria purchased 51,200 tons, Japan was in for 28,600 tons, and Mexico bought 28,300 tons. The total would've been higher, but an unnamed country canceled shipments totaling 49,000 tons.

Exports for the week totaled 629,800 metric tons, up from 620,700 tons a week earlier, the USDA said in its report.

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3. Freeze Warnings in Effect From the Dakotas Through Wisconsin

Freeze warnings and watches have spread throughout the Midwest and now range from North Dakota, south into Missouri, and east to Lake Michigan, according to the National Weather Service.

In southern North Dakota and northern South Dakota, temperatures overnight fell as low as 22 degrees Fahrenheit, the NWS said in a report early this morning. Freeze warnings are in effect until 10 a.m. central time in the area.

In eastern Nebraska and western Iowa, meanwhile, temperatures dropped to around 29 degrees overnight, the agency said.

It's much of the same further east in parts of Iowa and northern Illinois this morning, where temperatures dropped into the upper 20s overnight, the NWS said.

In the southern Plains, thunderstorms are expected to rumble across the Oklahoma and Texas panhandles today, though storms are not expected to be severe, the agency said.

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