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3 Big Things Today, May 9

Soybeans, Grains Lower Overnight; Ethanol Production Rises Week to Week, Inventories Decline.

1. Soybeans, Grains Lower Overnight on Trade Tensions

Soybeans and grains declined overnight as tensions between the U.S. and China ratchet up.

President Donald Trump said China “broke the deal” between the world’s two largest economies, which is why the U.S. decided to increase tariffs to 25% from 10% on $200 billion worth of Chinese goods starting Friday.

Beijing, meanwhile, has said that it will retaliate if Washington moves forward with its plan to raise the levies.

Chinese Vice Premier Liu He is in Washington for further negotiations today.  

Soybeans for May delivery fell 4¼¢ to $8.23 a bushel overnight on the Chicago Board of Trade. Soy meal lost 90¢ to $292 a short ton, and soy oil declined 0.19¢ to 26.81¢ a pound.

Corn futures for May delivery lost 3¢ to $3.61¼ a bushel overnight.

Chicago wheat for May delivery dropped 3½¢ to $4.35½ a bushel, while Kansas City wheat fell 2¼¢ to $4.01¼ a bushel.

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2. Ethanol Production Rises in Week Through May 3, While Stockpiles Decline

Ethanol production rose in the seven days that ended on May 3, while inventories declined, according to the U.S. Energy Information Administration.

Output last week averaged 1.036 million barrels a day, up from 1.024 million barrels a day, the EIA said in a report.

In the Midwest, by far the biggest producer, production increased to 959,000 barrels a day, on average, up from 947,000 barrels.

West Coast output rose by 3,000 barrels to an average of 20,000 barrels a day, Gulf Coast production was up by 1,000 barrels to 25,000 barrels, and Rocky Mountain output rose to 14,000 from 13,000 barrels a day, on average.

East Coast production was the lone decliner, falling by 3,000 barrels to an average of 19,000 barrels a day, the EIA said.

Stockpiles, meanwhile, declined to 22.468 million barrels on May 3, down from 22.695 million the previous week, according to government data. That’s the lowest level since April 5.

In other news, the USDA will release its Weekly Export Sales Report this morning. Analyst are expecting corn sales from 550,000 to 1 million metric tons, soybean sales from 350,000 to 1.1 million tons, and wheat sales from 175,000 to 600,000 tons, according to researcher Allendale.

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3. Freeze Warning Issued For Much of Central Nebraska, More Flooding Seen in Arkansas, Louisiana

A freeze warning will go into effect tonight for much of central Nebraska and a few counties in northern Kansas, according to the National Weather Service.

Temperatures will fall as low as 28˚F., which may be harmful to any hard red winter wheat in the area. It’s unlikely newly planted corn will be affected as only 2% had emerged as of Sunday, USDA data show.

A freeze watch will be in effect for much of eastern Colorado and western Kansas, the NWS said. Still, temperatures are only expected to fall to the lower 30s overnight, which means they likely won’t hurt the hard red winter crop.

Farther south, tornado warnings, flash flood warnings, and flood warnings are all in effect for much of southern Arkansas and Louisiana.

Thunderstorms are producing heavy rain across the area. Up to 3 inches have already fallen in parts of Louisiana and flash flooding is expected, the NWS said.

An additional 3 inches of rain are possible.

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