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Wheat surges on low yield projections

Soybean futures ended higher Wednesday because of extreme heat over western and northern growing areas. DTN forecasts call for cooler and hopefully wetter weather ahead of the weekend, with limited rain chances for the next 10 days for the Dakotas, Minnesota, and Iowa. With soil drying out across that area, it would be no surprise for the soybean crop condition to fade even more in the coming week. Also supporting the market, soybean oil recovered from Tuesday’s losses. On the other hand, there is pressure from softening U.S. export demand.

Corn futures closed modestly higher, also because of the heat, especially in the Western Corn Belt. Some beneficial showers moved across parts of Minnesota and northern Illinois on Wednesday. DTN cites a forecast beginning Thursday projecting precipitation to originate in South Dakota, through parts of eastern Nebraska, southern Iowa and into northern Missouri. Coverage is only expected to be 35 to 40 percent of the Corn Belt. U.S. corn exports are sluggish with weekly inspections failing to reach the weekly average needed to reach USDA’s projection. Export demand is expected to pick up by late August and September.

Wheat futures were sharply higher from projections for lagging yields in North Dakota. A tour of 100 fields projected an average yield at 29.5 bushels per acre (bpa), compared to the five-year average of 43.3 bpa. That yield estimate was lower than anticipated and sent Minneapolis September wheat surging. Both Kansas City and Chicago futures followed. There are also reports that Russian wheat yields are disappointing. Also bullish is that the wheat producing Henan province in China is impacted by flooding with more rain on the way.

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