1. Soybean Futures Little Changed in Overnight Trading

Soybeans were little changed as traders await any response from the U.S. to China’s request that all bean shipments be certified COVID-free.

Chinese soybean buyers have asked exporters to guarantee that their beans are free from the virus, Reuters reported, citing an official with the U.S. Soybean Export Council. The request was made by local officials, not the federal government, the report said.

China is the world’s largest importer of soybeans.

“We expect grain exporters to question this likely impossible request,” Allendale researchers said in a note to clients Wednesday morning. “Of note, some meat packers in Brazil and the US have complied with a similar request.”

Corn futures were slightly higher overnight while wheat was little changed.

Soybean futures rose 1/2¢ to $8.75 ½ a bushel overnight on the Chicago Board of Trade. Soymeal futures rose $1.30 to $293.80 a short ton and soy oil declined 0.21¢ to 27.96 cents a pound.

Corn futures for July delivery gained 1 1/2¢ to $3.26 ½ a bushel overnight.

Wheat futures for July delivery fell 1/2¢ to $4.90 ½ a bushel, while Kansas City futures rose 1 1/2¢ to $4.45 a bushel. 

2. Global Trade Likely to Meet WTO’s Most-Optimistic Projection

It’s no secret that global trade took a major hit in the first half of 2020, but the World Trade Organization said in a report that it believes the worst is over.

In the second quarter, the WTO believes the volume of merchandise trade plunged about 18.5% year-over-year due to lockdowns associated with the COVID-19 virus.

While that sounds pretty bad, it could’ve been worse, the WTO said.

In April, the organization had two potential scenarios for trade in 2020: the most pessimistic outlook was that world trade would plunge by 32% and the best possible outcome would be that it would fall by 13%. The good news, according to the report, is that trade would only need to grow by 2.5% to achieve the most-optimistic projection.

Fiscal, monetary and trade policy will play a crucial role in how quickly the global economy recovers, said Roberto Azevedo, the director-general of the organization.

“In this context, the WTO assumes that the reaction of trade to changes in general economic activity will be somewhat less pronounced than in other crises because many of the particularly severe slumps were concentrated on non-tradeable services such as the hospitality industry,” Commerzbank said in a note to clients Wednesday. “Other sectors, such as electronics in particular, were hit much less hard, on the other hand.”

Still, improvements are not guaranteed, the WTO said.

“Looking ahead to 2021, adverse developments, including a second wave of COVID‑19 outbreaks, weaker than expected economic growth, or widespread recourse to trade restrictions, could see trade expansion fall short of earlier projections,” the organization said in its report.  

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3. Thunderstorms Expected in Parts of Iowa and Illinois Next Few Days

More storms are expected in parts of Iowa and northern Illinois today, though severe weather isn’t expected, according to the National Weather Service.

The precipitation is forecast to continue into tomorrow, and widespread storms are expected starting Friday when there’s potential for heavy rain and flash flooding, the NWS said in a report early this morning. Strong winds and large hail also are expected.

Several rivers and tributaries are already near or over their banks in the region, and the upcoming storms could worsen flood conditions, the agency said.

In the southern Plains where producers are harvesting winter wheat, some isolated thunderstorms are possible today with some produce quarter-sized hail and wind gusts of up to 60 miles an hour.

The storms likely will continue for the next several days, the NWS said, which could slow collection of the hard-red winter wheat crop.