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3 Big Things Today, February 7

Wheat Futures Fall Overnight; Ethanol Production Drops to Lowest in 16 Months.

1. Wheat Lower Ahead of USDA Reports Friday

Wheat futures were lower in overnight trading ahead of Friday’s data dump from the USDA and on a stronger dollar that may curb demand.

The USDA will release two months’ worth of supply and demand estimates tomorrow along with winter wheat seedings, quarterly grain stocks, and export sales that all were delayed due to the government shutdown.

Producers, analysts, and traders will be watching the reports closely for clues about what’s been happening and what the government thinks is going to happen.

The dollar, meanwhile, has risen steadily since the start of February, which could curb demand for U.S. grain. A strong greenback reduces purchasing power for overseas buyers, who often turn to alternative suppliers when it strengthens.

Corn and soybeans were little changed overnight.

Wheat futures for March delivery fell 4½¢ to $5.21½ a bushel overnight on the Chicago Board of Trade, while Kansas City futures lost 4½¢ to $5.04¾ a bushel.

Soybeans for March delivery declined 1½¢ to $9.20¼ a bushel overnight. Soy meal lost 60¢ to $308.40 a short ton, and soy oil rose 0.02¢ to 30.92¢ a pound.

Corn lost ¼¢ to $3.79¾ a bushel overnight

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2. Ethanol Production Falls to Lowest Level in Almost 16 Months as Midwest Output Plunges

Ethanol production in the week that ended on February 1 fell to the lowest level in almost 16 months while stockpiles were down slightly.

Output of the biofuel declined to 967,000 barrels a day, on average, last week, according to the Energy Information Administration. That’s the lowest since the week that ended on October 6, 2017, when production also averaged 967,000 barrels a day.

The last time output was below that level was in October 2016, EIA data show.

Production in the Midwest, by far the biggest-producing area, plunged to 893,000 barrels a day, on average, from 942,000 barrels the previous week. West Coast output was unchanged at 20,000 barrels a day.

On the East Coast, producers kicked out 26,000 barrels a day, up from 25,000 the previous week, Gulf Coast ethanol plants increased output to 14,000 barrels a day, up from 12,000, and in the Rocky Mountains, production was up to 14,000 barrels a day from 13,000 the previous week, the EIA said in a report.

Stockpiles also declined, falling to 23.947 million barrels in the week through February 1 from 23.98 million seven days earlier, the government said. Still, that’s the second-highest total since March behind only last week.

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3. Blizzard Warning in Effect For Minnesota, Wisconsin Under Winter Storm Warning

A blizzard warning is in effect in a line down the Minnesota borders with North Dakota and South Dakota, while a winter storm warning is in effect for pretty much all of Wisconsin and parts of Michigan, according to the National Weather Service.

In western Minnesota and the eastern Dakotas, snowfall totals are pegged from 3 to 5 inches, the NWS said in a report early this morning. Winds will pick up later this morning, creating blizzard conditions by late afternoon that will last into the evening.

Wind chills are expected to fall as low as -40˚F. tonight and tomorrow morning, the agency said.

In Wisconsin, as much as 10 inches of snow are expected north of Wausau. The heaviest precipitation is forecast for late this morning into the afternoon hours, when snow is expected to fall at a rate of an inch or two per hour.

Heavy sleet and freezing rain are expected in the Fox Valley and Lakeshore counties, which will make travel dangerous, the NWS said.

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