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3 Big Things Today, September 27

Corn, Beans Slightly Lower Overnight; EPA Proposes Reducing Renewable Volumes.

1. Corn, Beans Down Slightly Overnight as Yields Better Than Many Expected

Corn and soybeans were a bit lower overnight trading on the realization that yields may be closer to the USDA projections than previously thought.

The USDA earlier this month projected corn yield at 169.9 bushels an acre and production at 14.184 billion bushels, up from a prior outlook for 169.5 bushels and 14.153 billion, respectively.

Soybean yield was projected at 49.9 bushels an acre and output was pegged at 4.431 billion bushels, above August projections for 49.4 bushels and 4.381 billion bushels.

The September forecasts were higher than analysts had anticipated, causing many in the industry to doubt the numbers. Yield reports have been rolling in, and most of them have been fairly positive, analysts said.

Corn futures for December delivery fell 1¾¢ to $3.50½ a bushel overnight on the Chicago Board of Trade.

Soybeans for November delivery lost a penny to $9.62½ a bushel overnight. Soy meal futures declined 70¢ to $312.40 a short ton, and soy oil rose 0.11¢ to 33.56¢ a pound.

Wheat for December delivery dropped 3¾¢ to $4.50 a bushel in Chicago, while Kansas City futures declined 3½¢ to $4.48¾ a bushel.

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2. EPA Seeks Input on Lowering Renewable Volume, Grassley Calls it ‘Bait and Switch’

The EPA said on Tuesday it’s seeking comment on reductions in renewable volume obligations (RVO) in 2018 and 2019, raising the ire of industry groups and politicians from rural states.

The reductions for which the EPA is seeking comment concern advanced biofuels and total renewable fuels and biomass-based diesel.

The agency is proposing lowering the 2018 total renewable fuel volume requirement from 19.24 billion gallons to 18.77 billion gallons and the advanced biofuel proposed level from 4.24 billion gallons to 3.77 billion gallons.

The reduced levels are out of concern for biofuel imports, according to the EPA.

“There is no rationale for further lowering either the 2018 advanced biofuel volume requirement or the total renewable fuel volume,” Renewable Fuels Association President and CEO Bob Dinneen said in a statement. “As we outlined in our recent public comments to EPA on the proposed 2018 RVO, we see no statutory basis whatsoever for attempting to limit biofuel imports through the use of a general waiver. It is also likely that using RFS waiver authorities in an attempt to limit exports would be perceived as a nontariff trade barrier, which could run afoul of U.S. obligations under World Trade Organization rules.”

The EPA cited the expiration of the $1-a-gallon biodiesel credit and a Department of Commerce ruling saying the U.S. should put countervailing duties on up to 68% of biodiesel from Argentina and Indonesia, and that may affect the price of advanced biofuels.

Senator Charles Grassley of Iowa was a bit harsher than Dinneen in his criticism of the Trump administration’s push to lower the volume obligations.

“This seems like a bait-and-switch from the EPA’s prior proposal and from assurances from President Trump himself and cabinet secretaries in my office,” Grassley said in a statement. “Reducing volumes as the EPA proposes would undermine renewable fuel production. That’s contrary to the worthwhile goal of America first. It’ll undermine U.S. workers and harm the U.S. economy, particularly in rural areas. It’s contrary to the goal of meeting the country’s fuel needs through domestic production, which is critical to economic growth. This all gives me a strong suspicion that Big Oil and oil refineries are prevailing, despite assurances to the contrary.”

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3. Rain Moves Out, Dry Weather Expected in Much of Corn Belt; Maria Still Hammering East Coast

Much of the rain that was keeping farmers out of fields for the past few days has moved on, and dry weather is expected in much of the Midwest today.

There are few storms to report on Wednesday’s weather maps, as things seem mostly quiet in the Corn Belt. Forecasters are calling for mostly drier weather for the next couple of weeks.

On the East Coast, however, Maria is now a tropical storm but is still wreaking havoc on coastal beaches. Heavy surf and potential for rip currents continue with extremely strong winds along the North Carolina coast, according to the National Weather Service.

In Texas, rainfall is causing flash flooding in some areas, the NWS said.

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