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3 Big Things Today, October 31, 2019

Soybeans, Grains Lower Overnight; Ethanol Production Finally Breaks Million-Barrel Mark.

1. Soybeans, Grains Slightly Lower Overnight on Trade Worries

Soybeans and grains were modestly lower overnight on pessimism about a trade deal after it was announced the APEC summit in Chile scheduled for next month was canceled, creating another obstacle for U.S. and China to sign a trade agreement.

Chile decided against playing host to the summit due to security concerns.

U.S. President Donald Trump and Chinese President Xi Jinping were expected to meet at the conference and sign at least a partial trade deal.

With the summit now canceled, it’s unclear how that will affect any formal signing.

The sides have said that negotiations are ongoing despite Trump’s announcement earlier in October that the countries – the world’s two largest economies – had come to at least a “partial” agreement.

Soybean futures for November delivery fell 1¼¢ to $9.29¼ a bushel overnight on the Chicago Board of Trade. Soy meal gained 10¢ to $302.30 a short ton, while soybean oil added 0.13¢ to 30.85¢ a pound.

Corn futures for December delivery lost 3¢ to $3.87¾ a bushel overnight.

Wheat for September delivery fell 2½¢ to $5.06¾ a bushel, while Kansas City futures lost 3¼¢ to $4.15 a bushel.


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2. Ethanol Output Tops Million-Barrel Mark First Time Since September; Stocks Hit Two-Year Low

Ethanol production rose for the fifth straight week, finally breaking the 1 million-barrel mark for the first time since mid-September, according to the Energy Information Administration.

Inventories of the biofuel, meanwhile, declined week to week to the lowest level in more than two years.

Output increased to an average of 1.004 million barrels a day in the seven days that ended on October 25, the EIA said in a report.

That’s the highest level since the week that ended on September 3 and the first time it’s been above 1 million barrels a day, on average, since September 13, according to the government.

Gains were led, unusually, by output in regions outside the Midwest, which is by far the biggest-producing region in the country.

Production on the East Coast rose to an average of 26,000 barrels a day from 23,000 barrels a week earlier, the EIA said. Gulf Coast output rose to 22,000 barrels a day from 19,000 barrels.

West Coast production increased to 18,000 barrels a day, on average, from 15,000 barrels a week earlier, and Rocky Mountain output was unchanged at 14,000 barrels, the agency said.

In the Midwest, production declined by 1,000 barrels a day to an average of 925,000 barrels last week, government data show.

Stockpiles in the week through October 25 declined to 21.099 million barrels, down from 21.364 million the previous week and the lowest level since October 20, 2017, according to the EIA.

In other news, the Weekly Export Sales Report is due out this morning, and analysts are expecting corn sales form 300,000 to 800,000 metric tons, soybean sales from 500,000 to 1.1 million tons and wheat sales from 200,000 to 500,000 tons, researcher Allendale said in a report this morning.


3. Freezing Weather Overnight in Missouri, Oklahoma, Arkansas; Snow Falling in Illinois, Iowa

Freezing weather has moved into parts of the southern Corn Belt with temperatures in Missouri, eastern Oklahoma, and Arkansas in the 20s, according to the National Weather Service.

In northern Missouri, temperatures overnight dropped as low as 23˚F., the NWS said in a report early this morning. A freeze warning is in effect until 10 a.m. local time.

“Frost and freeze conditions will kill crops (and) other sensitive vegetation,” the agency said.

In eastern Oklahoma and western Arkansas, temperatures fell into the mid-20s overnight, the NWS said.

Farther north, a winter weather advisory is in effect for parts of eastern Iowa and northern Illinois.

“Light to moderate snow will continue through daybreak then gradually begin to end from west to east this morning through early afternoon,” the agency said.

As much as 5 inches of snow are expected in the area and wind gusts of up to 30 mph are forecast, mostly along the Missouri River.

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