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3 Big Things Today, January 24, 2020

Soybeans, Grains Lower in Overnight Trading; Ethanol Production Drops to Two-Month Low.

1. Soybeans, Grains Drop on Fears Coronavirus Will Hurt Demand

Soybeans and grains were lower on concerns about the spreading coronavirus in China that could end up affecting demand.

China has put travel restrictions on more than 35 million people amid government reports that put the death toll from the disease at 26. More than 800 cases of coronavirus have been detected.

The news out of China have led the country to reportedly cancel the Lunar New Year celebrations in Beijing and closed Shanghai Disneyland in a bid to stop the spread of the disease.

It’s not just commodities that are feeling the effects of the contagion; stocks globally have decline the past few days as fears of the disease spread.

China’s Economist Intelligence Unit said in a report Thursday that the spread of the disease could have a “significant” effect on not only the Chinese economy but elsewhere, the South China Morning Post reported. The virus could cause a decline of 0.5 to 1 percentage point in the Chinese economy, the report said.

Soybean futures for March delivery fell 3½¢ to $9.06 a bushel overnight on the Chicago Board of Trade. Soy meal futures lost 40¢ to $298.50 a short ton, and soy oil declined 0.24¢ to 32.24¢ a pound.

Corn futures for March delivery dropped 2½¢ to $3.91¼ a bushel.

Wheat futures for March delivery fell 4½¢ to $5.76 a bushel, while Kansas City futures lost 3¼¢ to $4.89 a bushel.

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2. Ethanol Production Drops to Lowest in More Than Two Months; Stockpiles Jump

Ethanol production fell to the lowest level in more than two months, while stockpiles surged to the highest since July.

Output of the biofuel in the seven days that ended on January 17 were reported at an average of 1.049 million barrels a day, according to the Energy Information Administration.

That’s down from an average of 1.095 million barrels a day and the lowest since the week that ended on November 15, the EIA said in a report.

None of the regions saw gains last week. In the Midwest, by far the biggest-producing region, output averaged 974,000 barrels a day, down from 1.012 million barrels a day the previous week.

East Coast production averaged 24,000 barrels a day, down from 28,000 barrels a week earlier, Gulf Coast output came in at an average of 21,000 barrels a day, down from 25,000, and West Coast production averaged 15,000 barrels a day, down from 16,000 barrels the previous week, the agency said.

Output in the Rocky Mountain region was unchanged at 14,000 barrels a day, on average, the EIA said.

Stockpiles, meanwhile, jumped to 24.031 million barrels in the seven days through January 17.

That’s up from 23.006 million a week earlier and the highest level since July 26, the agency said in its report.

In other news, the USDA will release its weekly Export Sales Report this morning, a day late due to the Martin Luther King Jr. holiday on Monday.

Analysts have pegged corn sales from 700,000 to 1.2 million metric tons, soybean sales from 700,000 to 1.3 million metric tons, and wheat sales from 300,000 to 800,000 metric tons, according to researcher Allendale.

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3. Winter Weather Continues as More Snow Forecast For Parts of Missouri, Iowa, Illinois

Winter weather continues in much of the central Midwest as a winter weather advisory is in effect for much of Missouri and parts of Iowa and Illinois, according to the National Weather Service.

In central Missouri and west-central Illinois, another 2 inches of snow are expected today, the NWS said in a report early this morning. Road conditions likely will become slippery.

In eastern Iowa and western Illinois, another 2 inches also are likely to fall today. Another round of snow may develop tonight with another 3 inches possible in northwestern Illinois heading into the weekend, the NWS said.

Light snow is expected to continue Saturday morning in the area.

In eastern Nebraska and western Iowa, meanwhile, wet snow on the ground could freeze and create hazardous driving conditions, the agency said. Some light snow is possible today through southwestern Iowa, though accumulations are expected to be minimal.

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