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IKAR in Mass Media

3 Big Things Today, October 10, 2023

12 октября 2023 года

Soybeans, Grains Lower Overnight; Rising Interest Rates to Effect Ag Producers

1. Soybean, Grain Futures Lower Overnight

Soybeans and grains were lower in overnight trading amid ample global supplies.

Brazilian soybean production is pegged at a record 163 million metric tons by the U.S. Department of Agriculture, which if realized would be a record.

Exports are pegged at 97 million metric tons, up from 95 million tons a year earlier and well ahead of the 79.1 million tons shipped two years prior, USDA data shows.

Customs data from the South American country show exports in the first week of October totaled a million metric tons.

Grain prices also were lower overnight as Russian grain production continues to grow.

Russian grain output this year is forecast by Russian consultancy IKAR, or the Institute for Agricultural Market Studies, at 141.2 million metric tons, up narrowly from the previous outlook.

Export prices in the country have declined recently, which may make Russian supplies more attractive to overseas buyers.

Wheat production in Russia is seen by USDA at 85 million metric tons. That's down from the previous year's 92 million metric tons. Still, exports are forecast at 49 million tons versus 46 million tons a year earlier.

Soybean futures for November delivery fell 8½¢ to $12.55¾ a bushel overnight on the Chicago Board of Trade. Soymeal was down $2.10 to $372.50 a short ton while soy oil lost 0.78¢ to 53.15¢ a pound.

Wheat futures for December delivery plunged 11¼¢ to $5.61½ a bushel and Kansas City futures were down 11¢ to $6.75 a bushel.

Corn for December delivery declined 3½¢ to $4.84¾ a bushel.

2. Interest Rates Likely to Impact Ag Producers

Interest rates have risen considerably in the past year as the Federal Reserve attempts to rein in inflation, and that will have a lasting effect on agricultural producers.

Among the most immediate impacts will be the obvious effect on credit; elevated borrowing costs will add to already-high inputs, USDA's Agriculture Marketing Service said in a report.

"If these trends persist, high interest rates could thus stifle long-term production growth," the AMS said.

Higher interest rates also curb liquidity in financial markets, which can lead investors to liquidate their long positions, or bets on higher prices. Liquidity is necessary to ensure "smooth operation" of financial markets, the agency said.

Rising interest rates also may have an effect on currencies.

Higher interest rates likely mean a stronger U.S. dollar, which drives up the cost of all things priced in greenbacks, the AMS said, "Which is particularly problematic for low-income food-deficit countries that rely on these imports to feed their populations."

The Fed's goal, the agency said, is now to return not only to a low-inflation era but also to price stability. Members of the Federal Open Market Committee have said they expect high rates for quite some time, and another rate hike is expected this year.

"Thus, high interest rates seem here to stay, and with them the potential adverse impacts on agricultural markets described" in the report, the AMS said.

3. Freeze Warnings in Effect in Northern U.S.

Freeze warnings have been issued for much of northern Minnesota and parts of eastern North Dakota as temperatures drop as low as 27° F in the area, according to the National Weather Service.

The warning in central and northern Minnesota will last until 10 a.m. local time, the NWS said in a report early this morning.

Parts of Nebraska and Illinois and the entirety of Iowa are facing frost warnings this morning as temperatures overnight fell into the low- to mid-30s.

Frost warnings also are in effect for southern Minnesota and parts of Wisconsin, Indiana, and Ohio, NWS maps show.

In southern Missouri, there's about a 40% chance of thunderstorms tonight and tomorrow morning, though there's a better chance — up to 70% — for showers on Thursday evening and Friday morning, the agency said.

https://agriculture.com/

Source: agriculture.com  |  #grain   |  Comments: 0   Views: 5

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