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3 Big Things Today, January 9, 2020

Soybeans, Grains Higher Overnight; Ethanol Production Falls to Lowest in a Month.

1. Soybeans, Grains Higher Overnight Ahead of WASDE Report

Soybeans and grains were higher in overnight trading ahead of tomorrow’s World Agricultural Supply and Demand Estimates, or WASDE, Report from the USDA.

Analysts expect the agency to peg output at about 13.5 million bushels on yield of 166 bushels an acre, according to researcher Allendale. Harvested acres are forecast at 81.3 million acres.

Soybean output is seen at 3.51 billion bushels on yield of 46.5 bushels an acre and harvested area of 75.6 million acres.

Corn ending stockpiles are seen at 1.776 million bushels, soybean inventories are forecasts around 431 million bushels, and wheat ending stocks are pegged at 970 million bushels, Allendale said.

Investors also are optimistic about the trade deal with China as the nation’s Ministry of Commerce said Vice Premier Liu He, who was instrumental in hammering out the Phase One deal, will be in Washington next week to sign the agreement.

The deal will reportedly be signed during a ceremony with President Donald Trump.

China has agreed to increase purchases of agricultural products and make concessions on intellectual property rights. In exchange, the U.S. said it would forego implementation of new tariffs and suspended planned levy increases on Chinese imports.

Soybean futures for March delivery rose 5¼¢ to $9.52½ a bushel overnight on the Chicago Board of Trade. Soy meal futures gained 70¢ to $302.50 a short ton, and soy oil added 0.31¢ to 34.87¢ a pound.

Corn futures for March delivery rose 2¼¢ to $3.86½ a bushel.

Wheat for March delivery gained 4¾¢ to $5.57½ a bushel, while Kansas City futures added 5¢ to $4.85 a bushel.

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2. Ethanol Production Falls to Lowest Level in a Month, Stockpiles Jump

Production of ethanol fell for a second straight week to the lowest level in more than a month, according to the Energy Information Administration.

Output of the biofuel declined to an average of 1.062 million barrels a day, down from 1.066 million barrels the previous week, the EIA said in a report.

That’s the lowest level since the seven days that ended on November 29.

In the Midwest, by far the largest-producing region in the U.S., production averaged 984,000 barrels a day, down from 989,000 barrels a week earlier, government data show.

That was the entirety of the decliners as East Coast production was unchanged at an average of 25,000 barrels a day and Rocky Mountain output was unchanged at 14,000 barrels a day.

Gulf Coast output rose by 1,000 barrels to an average of 22,000 barrels a day and West Coast production increased by 1,000 to 17,000 barrels a day, the EIA said in its report.

Stockpiles, meanwhile, jumped to 22.462 million barrels, up from 21.034 million a week earlier and the largest amount since September 20, the agency said.

In other news, the weekly Export Sales Report is delayed for a third straight week. After the Christmas and New Year’s holidays, a snowstorm earlier this week will keep the report from coming out on time.

Washington-area government agencies closed early on Tuesday due to the threat of winter weather, the USDA said. That led to the delay in the Export Sales Report, which will come out at 8:30 a.m. on Friday.

When the report is released, analysts expected corn sales from 350,000 to 725,000 metric tons, soybeans from 400,000 to 850,000 tons, and whet sales from 200,000 to 550,000 tons, according to Allendale.

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3. Excessive Rainfall Expected From Oklahoma to Michigan Starting Tomorrow

Flash flood watches are in effect from eastern Oklahoma northeast into parts of Ohio and Michigan, according to the National Weather Service.

On the southern edge of the storm in Oklahoma and Arkansas, bands of heavy rainfall are expected starting tomorrow, the NWS said in a report early this morning.

Around 2 to 4 inches of rain are expected in most of the region, though some areas could see as much as 6 inches of precipitation.

“Since vegetation is dormant, more of this heavy rainfall will become runoff and will raise the quick-onset flash flood threat,” the agency said. “In addition, several main-stem rivers are expected to flood from the heavy rains, especially the Illinois, Poteau, and Kiamichi river basins.”

In southern Illinois, as much as 4 inches of rain are expected, which also could result in flooding of low-lying areas. Streams and tributaries are expected to overrun their banks, while larger rivers could see a “significant” increase in water levels, the NWS said.

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