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3 Big Things Today, September 23, 2022

Soybeans, Grains Drop Overnight; Export Sales Lower Across the Board

1. Soybean and Grain Futures Plummet in Overnight Trading

Soybean and grain futures plunged in overnight trading as the value of the dollar continues its rise, making dollar-denominated goods more expensive for overseas buyers and leading to an exodus in other assets including commodities.

The value of the dollar has been rising amid interest-rate hikes by the U.S. Federal Reserve in a bid to get inflation under control. The Fed this week increased its federal funds rate -- used by institutions to set interest rates on large, long-term purchases -- by 75 basis points for a third straight time.

Rising interest rates also increases fears that demand will wane, which is ultimately the goal to bring down prices.

Treasury yields and equities also are taking a beating overnight. Crude oil is down more than 3%.  

Investors are exiting almost all asset classes and turning to cash, which had inflows of $30.3 billion, Bloomberg reported, citing strategists from Bank of America, who use EPFR Global data. Outflows from global equity funds, meanwhile, totaled $7.8 billion in the seven days that ended on Sept.21, the report said.

Export sales of soybeans, corn and wheat all dropped week-to-week, an indication of weak demand for U.S. supplies.

Soybean futures for November delivery fell 11 1/2¢ to $14.45 ½ a bushel overnight on the Chicago Board of Trade. Soymeal lost $2.90 to $426 a short ton, while soybean oil dropped 1.39¢ to $65.07 a pound.

Corn futures for December delivery lost 10 1/4¢ to $6.78 a bushel.

Wheat futures for December delivery plunged 16 1/4¢ to $8.94 ½ a bushel, while Kansas City futures were down 11¢ to $9.68 ½ a bushel.

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2. Export Sales Drop Across the Board Last Week, USDA Says

Export sales of corn, beans and wheat all fell week-to-week, according to data from the USDA.

Corn sales in the seven days that ended on Sept. 15 dropped to 182,300 metric tons from 583,100 tons the previous week, the agency said in a report.

Japan was the big buyer at 82,300 metric tons, followed by Egypt at 65,000 tons and Colombia at 60,000 tons. Venezuela purchased 13,200 tons and Mexico was in for 8,700 tons. The total would've been higher but an unnamed country nixed shipments of 66,300 metric tons, the agency said.

Exports for the week totaled 563,000 metric tons, up from 426,800 tons a week earlier.

Soybean sales to overseas buyers declined to 446,400 metric tons from 843,000 tons, the USDA said.

Egypt was in the market for 174,000 metric tons of U.S. beans, China took 152,500 tons, Mexico bought 70,600 tons, Indonesia was in for 66,000 tons and South Korea purchased 54,000 tons. An unknown buyer canceled cargoes of 184,700 metric tons, the agency said.

Exports for the week were reported at 522,500 metric tons, up from 375,900 tons.

Wheat sales last week came in at 183,500 metric tons, as Indonesia purchased 136,000 metric tons, China bought 134,300 tons, Colombia was in for 55,900 tons, Japan took 43,800 tons and Taiwan bought 35,100 tons.

Those purchases were offset by a cancelation of 255,000 metric tons by an unknown destination, the government said.

Exports of the grain from the U.S. last week totaled 678,200 metric tons, up narrowly from 676,800 tons a week earlier, the USDA said in its report.

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3. Freeze Warnings, Frost Advisories Issued in Parts of Wisconsin

Freeze warnings and frost advisories have been issued for parts of Wisconsin as temperatures overnight dropped, according to the National Weather Service.

Temperatures overnight fell as low as 30 degrees Fahrenheit, resulting in frost formation, the NWS said in a report early this morning.

Some locales saw temperatures from 33 to 35, resulting in the frost advisories.

In central Kansas, meanwhile, some showers and storms will rumble through the area this morning and afternoon, the NWS said. Strong storms are not expected.

In eastern Oklahoma and parts of Arkansas, warm and dry weather will combine to increase the risk of wildfires.

"Unseasonably warm temperatures will combine with ongoing drought conditions and a southerly breeze to produce a limited fire weather danger this afternoon across portions of northeast Oklahoma," the NWS said.

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