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3 Big Things Today, February 13, 2020

Soybeans, Grains Lower Overnight; Weekly Ethanol Production Drops, Stockpiles Rise.

1. Soybeans, Corn Lower Overnight on Global Demand Worries

Soybeans and grains were lower overnight as the coronavirus continues to spread, increasing concerns that Chinese demand for U.S. agricultural commodities will weaken further.  

China yesterday changed the methodology it uses to determine the number of people infected with the disease and now says the total number of cases in the country stands at almost 60,000 people with deaths totaling almost 1,400.

Japan says it now has 218 confirmed cases of the coronavirus on board a cruise ship quarantined in the country’s waters. That’s up by 44 from the previous day’s tally.

So far, the impact of the disease on the global economy is unknown, but several companies have shut production, and travel to and from China has slowed considerably.

That’s led to worries about demand for agricultural products including soybeans. China is the world’s biggest importer of the oilseeds.

Soybean futures for March delivery fell 2½¢ to $8.90 a bushel in overnight trading on the Chicago Board of Trade. Soy meal futures declined 20¢ to $291.50 a short ton, and soy oil lost 0.51¢ to 30.52¢ a pound.

Corn futures for March delivery fell 2¼¢ to $3.80¾ a bushel.

Wheat futures for March delivery dropped ½¢ to $5.47 a bushel, while Kansas City futures lost 2¾¢ to $4.68¼ a bushel.


2. Ethanol Production Declines Week to Week, Inventories Improve

Ethanol production plunged in the seven days that ended on February 7, while inventories increased, according to the Energy Information Administration.

Output fell to an average of 1.033 million barrels a day last week, down from 1.081 million the previous week, the EIA said in a report. Production had rebounded from an almost three-month low in the seven days through January 31 before last week’s decline.

In the Midwest, by far the largest-producing region, output fell to an average of 955,000 barrels a day from 1.001 million a week earlier, the agency said.

East Coast output fell to 24,000 barrels a day, on average, from 26,000 a week earlier. Production in the Rocky Mountain region was unchanged at 14,000 barrels a day, and output on the West Coast was unchanged at 17,000 barrels, the EIA said.

Gulf Coast production, meanwhile, rose by 1,000 barrels to an average of 24,000 barrels a day last week.

Stockpiles of ethanol through February 7 rose slightly to 24.358 million barrels from 23.474 million a week earlier, government data show.

In other news, the USDA’s weekly Export Sales Report is due this morning.

Analysts are expecting corn sales from 700,000 to 1.3 million metric tons, soybean sales from 600,000 to 1 million metric tons, and wheat sales from 300,000 to 700,000 metric tons, according to Allendale.  


3. Snow, Cold Weather Expected For Much of Eastern Midwest; Windchill Warnings in Dakotas

More winter weather is expected from eastern Iowa into Ohio today as snow and extremely cold windchills hit the area, according to the National Weather Service.

In eastern Iowa and western Illinois, light snow from the storm that’s moving east is expected along with winds of up to 30 mph, the NWS said in a report early this morning.

Windchills will fall as low as -35˚F.

Farther east in northern Ohio and southern Michigan, another inch of snow on top of what’s already on the ground is expected this morning.

“Light snow and patchy freezing drizzle will continue through the morning,” the NWS said. “Periods of moderate snow will be possible through mid- to late morning before tapering off. Falling temperatures will begin to limit melting of snow on roads.”

Windchill warnings are in effect for a large chunk of land that includes most of eastern North Dakota, eastern South Dakota, Minnesota, and northern Iowa.

Windchills in the area are expected to hit as low as -45˚F. this morning, the agency said.  

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