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3 Big Things Today, February 22

Beans, Grains Little Changed Overnight; Ethanol Output Misses Million-Barrel Mark Again.

1. Beans, Grains Little Changed as Investors Await Trade News

Soybeans and grains were little changed overnight as investors await more news from trade talks with China.

Media reports yesterday indicated the sides were close to a deal and that the U.S. was drafting memorandums of understanding that would end the trade dispute between the countries.

Negotiators met in Washington yesterday and talks will continue today, though no formal agreement is expected to be announced just yet. Officials are getting precariously close to the March 1 deadline.

It’s still unclear whether President Trump will extend the deadline, after which the White House has said it will bump the tariff rate on more than $200 billion worth of Chinese goods to 25% from their current level of 10%.  

A deal would end the months-long trade war between the countries in which each imposed tariffs on the other’s goods. Soybeans were especially hard hit as the Asian nation, once the biggest importer of U.S. oilseeds, essentially stopped purchases.

Soybeans for March delivery rose 1¼¢ to $9.12¼ a bushel overnight. Soy meal gained 80¢ to $310.60 a short ton, and soy oil fell 0.11¢ to 30.71¢ a pound.

Corn for March delivery rose 1¼¢ to $3.76¾ a bushel in Chicago.

Wheat for March delivery fell ¼¢ to $4.90¾ a bushel overnight, while Kansas City futures added ¾¢ to $4.64 a bushel.

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2. Ethanol Production Falls Below 1 Million-Barrel Mark Second Time in Three Weeks

Ethanol production in the U.S. fell below the 1 million-barrel-a-day average for the second time in three weeks in the seven days that ended on February 15, according to the Energy Department.

Output averaged 996,000 barrels a day last week, down from 1.029 million the previous week. Production also fell to 967,000 barrels a day, on average, in the seven days through February 1, the Energy Information Administration said in a report.

That’s only the third time output has missed the 1 million-barrel-a-day mark in the past year, government data show.

Production declined in all five regions of the U.S. Midwestern output, by far the largest, declined to 936,000 barrels a day, on average, from 959,000 the previous week, the EIA said.

East Coast output dropped to 18,000 barrels a day from 24,000, Gulf Coast production declined to 13,000 barrels a day from 14,000, Rocky Mountain dropped to 12,000 barrels a day from 13,000, and West Coast producers put out 17,000 barrels a day, down from 19,000 the previous week.

Stockpiles, meanwhile, increased week to week, the EIA said.

Inventories in storage in the U.S. on February 15 totaled 23.913 million barrels, according to government data. That’s up from 23.466 million barrels a day the previous week.

In other news, the USDA will release export sales data today covering the past six weeks, catching up from the 35-day government shutdown.

Analysts forecast corn sales of 4.05 million to 7.25 million metric tons, soybean sales from 6.1 million to 9.6 million tons, and wheat sales from 2.05 million to 3.3 million tons, researcher Allendale said in a morning note.

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3. Winter Weather Advisory in Effect For Much of Central Midwest, Northern Plains

The Midwestern U.S. and Northern Plains can’t seem to catch a break as another round of winter storms takes aim at the regions.

A winter weather advisor is in effect for almost all of Nebraska, parts of the Dakotas into Iowa, Wisconsin, and extreme northern Illinois, according to the National Weather Service.

In Nebraska, mixed precipitation is expected with snow accumulations as high as 4 inches and wind gusts of up to 40 mph, the NWS said in a report early this morning. Roads will be slippery and travel could be hazardous.

In parts of central and eastern South Dakota, accumulations from 2 to 5 inches are forecast for today along with an ice glaze that will coat surfaces, the agency said.

In North Dakota and Minnesota, light snow is expected with another 4 inches of accumulation predicted by the NWS. The winter weather there is forecast to start this evening and continue into Saturday afternoon, according to the government.

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