Wheat futures plunge overnight; China soybean imports to rise in 2023-2024
1. WHEAT FUTURES DROP IN OVERNIGHT TRADING
Wheat futures plunged to the lowest in a week and corn and soybeans fell overnight on the extension of an agreement keeping agricultural products flowing out of Ukraine and amid improving crop conditions in Kansas.
The Black Sea Grain Initiative was extended for at least 60 days on Saturday, when it was due to expire. The plan was originally brokered by the United Nations and Turkey last July and implemented at the beginning of August. It was extended for 120 days in November.
The UN said in a statement that the initiative had been extended, but didn't specify for how long. Since the beginning of the program at the start of August, more than 25 million metric tons of agricultural products have shipped from Ukraine, which has been under attack by Russian forces since February 2022.
"The Black Sea Grain Initiative, alongside the memorandum of understanding on promoting Russian food products and fertilizers to the world markets, are critical for global food security, especially for developing countries," the United Nations said in a statement.
Also weighing on prices is a slight improvement in crop conditions in Kansas, the biggest U.S. producer of winter wheat.
Nineteen percent of the state's wheat crop was in good or excellent condition at the start of the week, up from only 17% seven days earlier, the U.S. Department of Agriculture said in a report this week.
Half of the crop was rated poor or very poor, down from 52% a week earlier, the USDA said.
Still, the news wasn't as good for soil moisture. Topsoil moisture was rated 32% adequate and 1% surplus in the latest report, while subsoil moisture was 21% adequate, the agency said.
That compares with 34% and 24% adequate, respectively, the previous week.
Wheat futures for May delivery lost 16 1/2¢ to $6.66 ¾ a bushel overnight on the Chicago Board of Trade, while Kansas City futures dropped 14¢ to $8.06 ¼ a bushel.
Corn futures were down 5 1/4¢ to $6.24 ¾ a bushel.
Soybean futures for May delivery fell 7 1/2¢ to $14.59 ½ a bushel. Soybean meal was down $4.20 to $456.40 a short ton and soy oil lost 0.28¢ to 55.96¢ a pound.
2. CHINA SOYBEAN IMPORTS EXPECTED TO RISE IN 2023-2024, USDA SAYS
Chinese soybean imports will rise to 97 million metric tons in the 2023-2024 marketing year as lifting of restrictions related to COVID-19 in December will increase oilseed consumption, the USDA's Global Agricultural Information Network (GAIN) said in a 51-page report.
Imports of oilseeds in total will be flat year-over-year, but soybean purchases have been on the rise since lockdown measures were ended in the last month of 2022, the USDA said.
Soybean imports in January and February jumped 16% year-over-year to 16.2 million metric tons after China dropped its zero-COVID policy in December, the USDA said, citing data from China's General Administration of Customs. That followed a "steep decline" in imports in 2021-2022 due to the lockdown.
The Asian country's continued support of soybeans likely will continue, resulting in increased production in the next marketing year, the report said. Total oilseed output will rise to 65.7 million metric tons in 2023-2024 from 64 million tons this year, the USDA said.
Oilseed planting will rise 1.4% next year, led by increases in peanut and soybean sowing, said the report.
"The (People's Republic of China) continues to emphasize greater oilseed production, particularly soybeans, in marketing-year 2023-2024," the USDA said. "Following significant gains in area and production in MY 2022-2023, more modest gains are forecast for MY 2023-2024. The extent to which area and production are maintained or increased will largely depend on subsidy levels provided for planting soybeans compared to corn."
The report, dated March 20, also indicated that China is taking a more-cautious-than-expected approach to genetically engineered corn.
Instead of full commercial cultivation of genetically engineered corn this year, the Asian nation's government appear to be expanding existing programs.
"The delay of commercial cultivation in GE corn until at least 2024 may constrain expansion of soybean area at the expense of corn area," the USDA said in its report.
3. DRY WEATHER HITS SOUTHERN PLAINS AMID STRONG WINDS, LOW HUMIDITY
Extremely dry weather is forecast for the southern Plains today amid strong winds and low humidity, according to the National Weather Service.
Red-flag warnings will take effect from 1 p.m. through 8 p.m. as relative humidity drops as low as 15%.
High-wind warnings also are in effect for parts of western Kansas and the Oklahoma and Texas panhandles, the NWS said early this morning.
Winds will be sustained from 30 to 40 miles an hour with gusts of up to 70 miles per hour expected, the agency said.
"Damaging winds may blow down trees and power lines," the NWS said. "Local power outages are possible. Travel will be difficult, especially for high-profile vehicles."
Further north, snow and rain are forecast for parts of eastern Nebraska and western Iowa tonight, the agency said.
Up to 3 inches of snow are possible in the area tonight, as are isolated thunderstorms, though severe weather isn't expected.
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