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3 Big Things Today, May 16

Beans, Grains Higher Overnight; Ethanol Output Jumps to Four-Month High, Stocks Plunge.

1. Soybeans, Grains Higher Overnight on Weather

Soybeans and corn futures were higher overnight on continued wet weather in parts of the Midwest that will further delay planting.

Storms that will bring rain and potentially hail are expected in several parts of the Midwest and Southern Plains today and through the weekend, according to the National Weather Service.

Spotty showers will slow planting in parts of Iowa, Illinois, Indiana, Ohio, and Michigan, Commodity Weather Group said in a report.

Rains over the weekend also will stall fieldwork in the northern and western Midwest, and more precipitation is in the forecast for early next week, the forecaster said. Weekend rainfall in the Northern Plains will cause delays in spring wheat seeding.

Investors also have an eye on the continuing trade war between the U.S. and China. President Donald Trump has said he expects a deal to be made in due time and earlier this week called the dispute a “little squabble.”

Treasury Secretary Steven Mnuchin has said he will return to China for further negotiations.

Still, the administration officially blacklisted China’s Huawei, adding the technology company to a list that bans it from buying components from the U.S. without government approval.

Soybeans for May delivery rose 5¢ to $8.40½ a bushel overnight on the Chicago Board of Trade. Soy meal gained $2.10 to $301.90 a short ton, and soy oil added 0.15¢ to 27.39¢ a pound.

Corn futures for May delivery rose 5½¢ to $3.75 a bushel overnight.

Chicago wheat for May delivery gained 8¾¢ to $4.57½ a bushel, while Kansas City wheat added 6¾¢ to $4.08¾ a bushel.

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2. Ethanol Production Jumps to Four-Month High, Stockpiles Lowest Since July

Ethanol production in the seven days through May 10 jumped to the highest level in almost four months while stockpiles declined, according to the Energy Information Administration.

Output surged to an average of 1.051 million barrels a day last week, up from 1.036 million barrels the previous week, the highest level since the week that ended on January 11, the EIA said in a report.

In the Midwest, easily the biggest producing region, production jumped to an average of 978,000 barrels a day, up from 959,000 barrels in the prior seven-day period, the agency said. East Coast output also increased, rising by 2,000 barrels to 21,000 barrels a day, on average.

Those were the only gainers as West Coast production was unchanged at 20,000 barrels a day, Rocky Mountain output dropped by 1,000 barrels to 13,000 a day, on average, and Gulf Coast producers curbed output by 6,000 barrels to 19,000 barrels, the EIA said.

Inventories, meanwhile, dropped to the lowest level in more than eight months.

Stockpiles on May 10 totaled 22.25 million barrels, the lowest since the week ended on July 27, the agency said in its report.

In other news, the USDA will release its Weekly Export Sales Report this morning at 7:30 a.m. in Washington.

Analysts are expecting corn sales from 300,000 to 900,000 metric tons, soybean sales from 300,000 to 1 million tons, and wheat sales from 150,000 to 600,000 tons, according to researcher Allendale.

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3. Strong Winds, Severe Storms Expected in Kansas; Iowa Sees Threat From Stationary Front

Strong winds are expected in the Southern Plains today followed by severe storms starting Friday, according to the National Weather Service.

Wind gusts of up to 35 mph and low humidity will lead to elevated wildfire risks in western Kansas and the Oklahoma panhandle, the NWS said in a report early this morning.

On Friday, strong storms that could bring large hail and “a few tornadoes” are in the forecast. Another round of storms is expected on Saturday evening, but the risk of severe weather is more constrained, the agency said.

Farther north, cool weather and thunderstorms with strong winds are expected in much of Iowa and northern Illinois this afternoon.

The main threats from the storms today and tonight will be heavy rain, small hail, and winds up to 60 mph, the NWS said. The biggest threat is that the storm will become stationary over the region, which could cause more flash flooding.

The storms will stick around through Friday and may even strike again Saturday, the agency said.

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