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3 Big Things Today, September 4

Wheat Futures Plunge Overnight; Argentina Implements Export Tax on Grains.

1. Wheat Futures Drop After Russia Says No to Export Limits

Wheat futures plunged after Russia said it doesn’t see a need to limit exports as had been rumored in the past few weeks and as the dollar jumped, making U.S. supplies less attractive to overseas buyers.

Russia’s Ministry of Agriculture said after meeting with exporters that there’s no need to curb shipments of wheat as its grain market is “stable.” Analysts and market-watchers have been bumping the price of wheat in the past few weeks on speculation that the country would limit shipments.

The USDA has pegged Russian wheat exports at 35 million metric tons in the 2018-2019 marketing year that started on June 1, down from 42 million the prior year. That’s still historically strong, however, as shipments in 2016-2017 totaled 27.8 million tons, according to the USDA.

Wheat for December delivery dropped 16½¢ to $5.29 a bushel overnight on the Chicago Board of Trade. Kansas City futures plunged 17¼¢ to $5.36 a bushel.

Corn futures were up ½¢ to $3.65½ a bushel overnight.

Soybeans for November delivery fell 1¼¢ to $8.42¼ a bushel in Chicago. Soy meal rose $1.10 to $308.30 a short ton, and soy oil rose 0.18¢ to 28.95¢ a pound.

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2. Argentina to Impose Export Tax on Grains in a Bid to Stabilize Economy

Argentina’s president said on Monday in a nationally televised speech that the government is imposing a tax on grain exports in a bid to get its budget gap under control and to stem inflation.

The country’s peso lost 16% last week and is now down almost 50% against the U.S. dollar this year.

President Mauricio Macri said in his televised speech that the government will implement an export tax of 4 pesos per dollar on exports of agricultural products. The levy on other goods would be 3 pesos per dollar.

Exporters are generally paid in dollars and have benefited from the slide in the peso. Macri said that’s why they’re are being asked to contribute.

The president told farmers that while it’s a “bad, terrible tax,” it’s necessary to ensure the country’s economy doesn’t slide further as it did at the start of the century when millions were impoverished and investors fled. He said he’d eliminate the tax when the economy stabilizes.

Government officials are expected to talk with the International Monetary Fund in Washington this week to discuss expediting a $50 billion loan program to help the country recover from the peso’s decline and bolster its economy.

Argentina is the sixth-biggest exporter of wheat globally.

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3. Flash Flood Warnings, Watches in Effect For Parts of Several Corn Belt States

Flash flood warnings and watches are again in effect for much of central Kansas northeast into northern Wisconsin as storms hammer both areas, according to the National Weather Service.

Storms are expected to drop 1 to 3 inches of rain today and tonight in parts of central Kansas and southeastern Nebraska, bringing the multiday totals to as much as 5 inches, the NWS said in a report early Tuesday morning.

“Excessive rainfall could  lead to flooding of low-lying areas,” the agency said. “If heavy rain falls in a short period of time, isolated flash flooding could occur, as well.”

In much of northern Iowa, southern Minnesota, and central to northern Wisconsin, another round of heavy rain is forecast today and tonight. Up to 6 inches of precipitation is possible, with heavier amounts locally.

Flooding is likely as rivers and streams are expected rise rapidly, the NWS said.

“This is a potentially dangerous situation, especially in those locations that are currently or have recently had heavy rain and flooding,” the agency said.

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