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3 Big Things Today, July 18

Corn, Beans Lower Overnight; Ethanol Production, Stockpiles Rise Week-to-Week

1. Corn, Beans Decline as Second Survey Looms

Corn and wheat were lower overnight as growers and investors alike await an Aug. 12 report showing how many acres were actually planted.

The U.S. Department of Agriculture on Aug. 12 is scheduled to release a second survey of planted acres that twill take into account the number of prevent plant acres.  

Still, much of the central U.S. is in the midst of a major heat wave with heat indexes topping 110 degrees Fahrenheit for another day. The weather so far hasn’t much given prices a boost, though, as investors focus on the longer-term fundamentals.

Crops were in decent shape at the start of this week, which also is keeping a lid on prices. Some 58% of U.S. corn was in good or excellent condition as of Sunday and 54% of soybeans earned top ratings. Both are up 1 percentage point from the previous week.

Corn futures for December delivery fell 4¢ to $4.37 ½ a bushel overnight on the Chicago Board of Trade.

Wheat for September delivery declined 4 1/4¢ to $5.01 ¼ a bushel, while Kansas City futures lost 4¢ to $4.37 ¾ a bushel.

Soybean futures for November delivery fell 2¢ to $8.98 ½ a bushel overnight. Soymeal dropped 10¢ to $307.40 a short ton and soybean oil rose 0.13¢ to 28.24¢ a pound.

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2. Ethanol Production Rises Week-to-Week, Stockpiles Reach Highest Since March

Ethanol production in the U.S. rose week-to-week while stockpiles surged to the highest level since March, according to the Energy Information Administration.

Output in the seven days that ended on July 12 averaged 1.066 million barrels a day, the EIA said in a report. That’s up from the 1.047 million barrels, on average, produced the previous week.

In the Midwest, by far the biggest producer of ethanol, output was reported at an average of 991,000 barrels a day, up from 967,000 the previous week. That made up the entirety of the weekly gain as all other regions saw production decline.

On the East Coast, output averaged 23,000 barrels a day, down from 25,000 the previous week. Gulf Coast production came in at 22,000 barrels a day, down from 24,000 a week earlier, the EIA said.

Rocky Mountain production fell by 1,000 barrels to 13,000 barrels a day, on average, and West Coast output dropped by 1,000 barrels to 16,000 a day, according to the government.

Inventories of the biofuel, meanwhile, jumped to 23.365 million barrels last week. That’s up from 23.009 seven days earlier and the highest level since the week that ended on March 29, the EIA said.

In other news, the USDA is expected to release its weekly export sales report.

Analysts are looking for corn sales from 350,000 to 800,000 metric tons, soybean sales from 100,000 to 700,000 metric tons and wheat sales from 200,000 to 400,000 metric tons, according to researcher Allendale.

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3. `True Summer Heat Wave’ Reaches East Coast, Indexes Around 115 Expected

The heat wave affecting much of the U.S. has spread east to the eastern seaboard.

Excessive heat warnings are in effect from northern Nebraska into Oklahoma and as far north as central Michigan, according to the National Weather Service.

In central Illinois, the heat index is expected to rise as high as 115 degrees today, the NWS said in a report early this morning. In northern Oklahoma the indexes are pegged from 108 to 112 degrees Fahrenheit.

Across more than two-thirds of the U.S., working or conducting activities outside will be dangerous as heat illnesses are possible, the agency said.

The heat is expected to last a couple more days.

“A strengthening ridge of high pressure will produce much above average temperatures from the Plains to the East Coast, a true summer heat wave,” the NWS said. “Highs in the 90s and triple digits combined with humidity and dewpoints surging into the upper 70s, if not low 80s, will create heat indices as high as 110 to 115 through this weekend. Air quality will likely be poor due to haze and little air circulation.”

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