Content ID

333834

3 Big Things Today, September 21, 2022

Wheat, Corn Higher Overnight; Producers Increasingly Rely on Off-Farm Income

1. Wheat and Corn Futures Rise in Overnight Trading

Wheat futures jumped and corn was higher in overnight trading on increased tensions in the Black Sea region as Russia announced referendums to annex territories in eastern and southern Ukraine that it now controls.

Russia would then claim any attack on those regions would be an attack on Russian soil, giving it more grounds for further hostilities.

The U.S. and other allies have said they will not recognize any elections by Russian authorities.

Russian forces, which started attacking Ukraine in late February, have faced several stunning defeats in recent weeks.

Vladimir Putin, the president of Russia, has openly questioned an agreement brokered by Turkey and the United Nations that allows grain to be shipped from Ukraine's ports.

The deal, which was brokered in late July, was put in place in a bid to help alleviate global hunger. Putin has said Ukraine is shipping grain to wealthy European countries while Ukraine offered up data showing shipments went to poor Asian and African countries as well as some in Europe.

Ukraine government data show exports of about 1.5 million metric tons in the first half of September. In August, exports of agricultural products from ports in Ukraine totaled around 4.5 million metric tons, according to data from the Ministry of Agriculture.

Prices also were up in overnight trading amid some adverse weather in Argentina.

Drier-than-expected weather this week and only light rains in some regions of the South American country yesterday and today likely will keep moisture levels low, Don Keeney, an agricultural meteorologist with Maxar, said in a note to clients.

"Rains over the next few days will remain too light to significantly improve moisture for late wheat growth," he said.

Wheat futures for December delivery surged 10¢ to $9.03 ¾ a bushel overnight on the Chicago Board of Trade, while Kansas City futures were up 8¢ to $9.71 a bushel.

Corn futures for December delivery rose 2 1/2¢ to $6.94 ½ a bushel.

Soybean futures for November delivery gained 3¢ to $14.81 ¾ a bushel. Soymeal lost $2.20 to $437.20 a short ton, while soybean oil rose 0.68¢ to $66.57 a pound.

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2. Agricultural Producers, Especially Young Farmers, Depend on Off-Farm Jobs

Agricultural producers often depend on off-farm jobs, especially those just starting out, according to a study from CoBank and the University of Missouri that was released this week.

About 56% of principal farm operators had a job off the farm in 2017, up from 37% in 1974, the report said. Among producers under the age of 35, 63% had other jobs.

"More reliable income and health care benefits were top reasons for off-farm job," the report said. "Half of farm households have negative farm income in a given year, so other income sources are critical for most farmers as they pay down agricultural investment debts."

Eighty-two percent of income comes from off-farm sources, giving producers more stability and the ability to support their farms, said the University of Missouri and CoBank, which is among the largest companies to offer loans and financial services to rural communities.

Financial risks are reduced by having a job off the farm, especially for younger producers who likely face higher debts as they grow their agriculture business, the study said.

Young farmers had an average debt-to-income ratio of about 21% from 2011 to 2019 versus an average of 6.3% for "off-farm occupation farms," the university and bank said.

Management and professional services and natural resource, construction and maintenance account for a combined 62% of off-farm jobs. Around 38% of farm spouses work in management and professional services while 30% work in trades and healthcare, the 46-page study said.

Farmers working other jobs are finding themselves commuting to large metropolitan areas for work opportunities, leaving rural and urban areas dependent on each other.

"While `rural' populations can be perceived as being isolated from nearby cities, the reality is that most rural residents with payroll jobs commute to these regional economic hotspots for employment," the report said. "And these cities, in turn, depend on the broader regional population for business labor and spending. This regional dependency becomes formalized over time when nonmetro counties are reclassified to metro, but that can also hide the dynamic success stories of many rural areas."

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3. Scattered Showers Forecast in Parts of Nebraska, Iowa and Kansas

Scattered storms are forecast for parts of eastern Nebraska and western Iowa this afternoon into tonight, though no severe weather is expected, according to the National Weather Service.

Rain also is expected in parts of southern Nebraska into central Kansas, the NWS said in a report early this morning.

"During the day today and into tonight, isolated to scattered thunderstorms will occur across much of the outlook area and may be embedded within rain shower activity," the agency said. "Severe storms are not likely, but some instances of small hail cannot be ruled out."

Further east in central and southern Illinois, scattered thunderstorms are in the forecast, bringing locally heavy downpours and lightning.

It's still going to be hot in the area, at least for one more day, with heat indexes as high as about 100 degrees this afternoon, the NWS said.

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