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3 Big Things Today, June 6

Soybeans, Corn Lower Overnight; Ethanol Production Falls to Lowest in Four Weeks.

1. Soybeans, Corn Lower Overnight on Trade Concerns

Soybeans and corn were lower in overnight trading as worries about ongoing trade disputes between the U.S. and its major trading partners weigh on prices.

China, once the largest buyer of U.S. soybeans, has said it will stop future purchases of the oilseeds as the trade war between the countries wears on.

Washington increased tariffs on more than $200 billion worth of Chinese goods in a bid to pressure Beijing into a trade agreement. President Donald Trump said he could raise tariffs on another $300 billion worth of Chinese imports.

The Trump administration also may implement tariffs on imports from Mexico, the biggest buyer of U.S. corn, which likely would lead the country to retaliate with levies on U.S. goods. Trump said the tariffs will begin next week unless Mexico assures him that it will stem the tide of immigrants to the U.S. border.

A Reuters report yesterday said the list of items Mexico would target doesn't include corn, however, as it’s a staple in Mexican food making. 

Soybeans for May delivery lost 7¢ to $8.62¾ a bushel overnight on the Chicago Board of Trade. Soy meal dropped $3 to $314.70 a short ton, while soy oil rose 0.01¢ to 27.23¢ a pound.

Corn futures for May delivery fell 1½¢ to $4.13¼ a bushel overnight.

Wheat for May delivery gained 4½¢ to $4.95¼ a bushel in Chicago, while Kansas City wheat rose 2¼¢ to $4.47¾ a bushel.

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2. Ethanol Production Falls to Lowest Level in Four Weeks, Inventories Down Slightly

Ethanol production in the U.S. fell to the lowest level in four weeks, and stockpiles declined in the seven days that ended on May 31, according to the Energy Information Administration.

Output last week came in at 1.044 million barrels a day, on average, last week, the EIA said in a report. That’s down from 1.057 million barrels the previous week and the lowest average since the seven days that ended on May 3.

Production in the Midwest, by far the largest-producing area, fell to an average of 965,000 barrels a day last week from 976,000 barrels.

Gulf Coast output also declined, falling to an average of 19,000 barrels a day from 24,000 barrels the previous week, the agency said.

Rocky Mountain production rose to 14,000 barrels a day, on average, from 12,000 barrels. West Coast output increase to 20,000 barrels from 19,000. East Coast production was unchanged at 26,000 barrels a day.

Inventories, meanwhile, declined to 22.553 million barrels on May 31, down slightly from 22.624 million seven days earlier. The total was the lowest since the week that ended on May 10, according to EIA data.

In other news, the USDA will release its Weekly Export Sales Report this morning. Analysts are expected combined old- and new-crop corn sales from 550,000 to 1.05 million metric tons, soybean sales from 250,000 to 750,000 tons, and wheat sales from zero to 600,000 tons, according to researcher Allendale.

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3. Flood Warnings in Effect For Parts of Oklahoma, Kansas, Missouri, Arkansas

Flood warnings and flash flood warnings and watches are in effect for a large chunk of land encompassing southeastern Kansas, northeastern Oklahoma, southwestern Missouri, and northwestern Arkansas, according to the National Weather Service.

“Thunderstorms containing excessive rainfall are expected to develop today, becoming more widespread by tonight,” the NWS said in a report early this morning.

One to 3 inches of rain are expected in the area with some counties getting 4 inches, the agency said.

The ground is already saturated from recent rains, so any precipitation that falls likely will run off, potentially creating flash floods.

Farther north, some isolated thunderstorms are possible in eastern Nebraska and western Iowa that could produce heavy rain, small hail, and gusts of winds, the NWS said.

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