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3 Big Things Today, September 6, 2022

Soybeans, Wheat Lower Overnight; European Wheat Exports Likely to Remain Steady

1. Soybeans, Wheat Lower in Overnight Trading

Soybean futures dropped in overnight trading after a long weekend amid forecasts for increased exports from Argentina after the country's government improved the exchange rate for the oilseeds.

Argentina on Sunday said exporters will get a preferential exchange rate for the month of 200 pesos per U.S. dollar. That's up from the prior rate of 139 pesos to the dollar.

Sales in the 2021-2022 marketing year at the end of August were down 10% from the same timeframe a year earlier, the agriculture ministry said. That was one reason the special exchange rate was created.

The dollar overnight strengthened against a basket of counterparts and were up 0.3% in early morning trading.

Wheat futures also were lower overnight on the improved greenback, which makes the price of dollar-denominated products including agricultural goods more expensive on the world market, potentially reducing demand for U.S. supplies.

Prices also were down on increased exports from Ukraine, where the number of shipments leaving ports continue to rise. Thirteen vessels sailed from Ukrainian ports on Sunday alone, the Ukraine Ministry of Agriculture said.

Soybean futures for November delivery dropped 12 ¾¢ to $14.07 ¾ a bushel overnight on the Chicago B oard of Trade. Soymeal lost $6.90 to $410.80 a short ton, and soybean oil fell 1.58¢ to $64.67 a pound.

Corn futures for December delivery was up a penny to $6.67 ¼ a bushel.

Wheat lost 5 ¾¢ to $8.05 ¼ a bushel in Chicago, while Kansas City futures lost 2 3/4 ¢ to $8.75 a bushel.

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2. European Wheat Prices Expected to Stay Stable, Commerzbank Says

European wheat prices likely will remain fairly stable at current levels due to uncertainty as Russian attacks on Ukraine continue, Commerzbank analysts said in a note to clients on Tuesday.

Exports from war-torn Ukraine continue to increase as an agreement brokered by Turkey and the United Nations in late July holds, the analysts said.

The largest convoy of ships since the deal took effect sailed from Ukrainian ports carrying about 282,500 metric tons of agricultural products, bringing the total amount shipped to around 2 million tons.

That's just the tip of the iceberg if Ukraine has its way.

"Over the next eight to nine months, the plan is to export 60 million tons of grains alone which would require a significant step up of exports," Commerzbank said.

Russian wheat shipments, however, are down 22% year-over-year, the bank said. Consumers and exporters are being deterred by informal sanctions or risks to the shipping companies' reputations, the analysts said.

Grain exports from Russia are expected to reach 4 million metric tons this month, and while that's an acceleration from recent months, it would still be down 15% year-over-year.


3. Extremely Dry Weather Expected in Parts of the Northern Plains

Red-flag warnings have been issued or all of Montana, Idaho and Washington while near-record heat is forecast in parts of western and central Nebraska, according to the National Weather Service.

Winds in central Montana tomorrow are forecast from 10 to 20 miles an hour with gusts of up to 30 miles an hour, the NWS said in a report early this morning.

Relative humidity is projected to fall to as low as 5%.

The combination of gusty winds and low humidity will create tinderbox-like conditions in the region, the agency said. Wildfires will spread rapidly, and burning is not recommended.

In the western half of Nebraska, meanwhile, temperatures will approach or surpass 100 degrees Fahrenheit today.

"The summer-like temperatures will combine with very dry air to result in elevated or near-critical fire-weather conditions," the NWS said.

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