Wheat Barely Higher Overnight; IGC Says Grain, Oilseed Prices up 12% This Year.

(Agriculture.com) – Wheat futures were modestly higher in overnight trading on reports that Egypt rejected a cargo of Russian wheat. Corn and beans also rose.

Egypt, the world’s biggest importer of wheat, reportedly rejected the shipment from Russia due to excessive amounts of grain fungus, Reuters reported, citing Egypt’s Agriculture Ministry.

That may mean the North African nation will turn to the U.S. for supplies.

Weather has been the main concern for market-watchers as extremely dry weather in the U.S., Russia, and Australia is threatening crops.

Thunderstorms hit the Southern Plains in the past week, giving relief to some hard red winter wheat plants that still have a few weeks left in the ground. Still, the rainfall wasn’t very widespread and mostly missed much of southwestern Kansas and the Oklahoma panhandle.

Parts of the Texas panhandle and much of central Kansas saw some decent rainfall in the past week, however. The weather system has moved out and the region is facing hot, dry weather for at least the next 10 days, according to weather forecasters. 

Wheat for July delivery rose 1¢ to $5.23 a bushel overnight on the Chicago Board of Trade. Kansas City futures added 1¾¢ to $5.42½ a bushel.

Corn gained 2¾¢ to $3.96¼ a bushel in Chicago.

Soybean futures for July delivery gained 1¼¢ to $10.24¼ a bushel overnight. Soy meal added 20¢ to $377.10 a short ton, and soy oil gained 0.05¢ to 31.53¢ a pound.

2. Grain, Oilseed Prices Up 12% Since Start of 2018, Grains Council Says                                           

Grain and oilseed prices globally are up 12% since the start of the year amid ongoing concerns about weather, logistical constraints, and solid demand, the International Grains Council said in a report on Thursday.

The IGC’s grains and oilseed price index came in at a reading of 213 in May. The index also rose 15% year over year, the council said.

The biggest gainer since the start of the year has been corn, whose prices are up 19% globally. Wheat has gained 15%, barley is up 13%, soybeans have risen 11%, and rice is up 7% since January 1, according to the report, which was published by Reuters.

“Gains in maize (corn) FOB prices have been especially marked, rising by more than one fifth so far in 2018,” the IGC said. “Support has stemmed mainly from production woes in Argentina and, more recently, in Brazil, contributing to a spike in overseas demand for U.S. supplies. The boost in exports has resulted in some tightening of the U.S. balance sheet in recent months and, while carryovers are expected to remain ample at the end of the current marketing year, the scene could be set for a much sharper drawdown in 2018/2019 stocks.”

The IGC said in a May 24 report that world corn inventories will drop to a five-year low by the end of the 2018-2019 marketing year with reductions in major exporting countries and in China.

For soybeans, prices have rallied due to the “dwindling crop in Argentina.”

Still, there are some concerns about the global grain trade. The continuing trade spat between the U.S. and China is weighing, as are declining sales to overseas buyers.

Sales of U.S. corn to overseas buyers since the start of the marketing year on September 1 are down 12% from the same time frame a year earlier, according to the USDA. Soybean sales are off by 11% year over year.

Wheat sales since the beginning of the grain’s marketing year on June 1, 2017, are down 15%, USDA data show.

“There have been some notable headwinds for grain and oilseed prices, not least due to concerns about the future of the U.S.-China trade relationship,” the IGC said in its report Thursday. “While tensions have de-escalated more recently, with authorities in China terminating an antidumping probe into U.S. sorghum imports, the exact terms of the latest agreement remain unclear.”

3. Storms Forecast For Parts of Wisconsin, Minnesota, Illinois; Southern Plains Turn Hot

Storms are forecast today for parts of Wisconsin and Friday and Saturday for some counties in Minnesota, according to the National Weather Service.

Severe weather isn’t expected with the storms, but locally heavy rainfall is possible, the NWS said in a report early Thursday morning.

Farther south, isolated thunderstorms are projected to hit south of Interstate 80 in Illinois this afternoon and early evening.

“A few storms are also possible near the Illinois and Wisconsin border late this afternoon into evening,” the agency said. “Even though severe weather isn’t anticipated at this time, strong storms could produce gusty winds. Portions of the Fox River will see minor flooding today.”

In the Southern Plains, the storm system that’s been hovering over the area is giving way to hot, dry weather. Temperatures in the Oklahoma and Texas panhandles will near triple digits, while winds will be light, the NWS said