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3 Big Things Today, April 6

Beans, Grains Mixed Overnight; Ethanol Output at Four-Month Low, Inventories Record High.

1. Soybeans, Grains Mixed as Traders Weigh South America Rain, Output

Soybeans and grains were little changed in overnight trading on Thursday as investors weigh wet weather in Argentina against rising crop projections in Brazil.

Widespread rainfall in Argentina is expected to slow the bean harvest, according to weather forecasters, though it’s unknown how long the rains will last. Output last year suffered from excessive precipitation during harvest, so the rain that seems to be starting just as crop collection begins has some investors worried.

Still, soybean production globally is expected to be extremely strong. Forecasts for Brazil have been increasing the past few months amid favorable weather. INTL FCStone raised its forecast for Brazil production to almost 112 million metric tons from 109 million, and consultancy Celeres has pegged output at 114 million metric tons, up from a March outlook for 110 million.

Soybean futures gained a penny to $9.45¼ a bushel overnight on the Chicago Board of Trade. Soy meal rose 70¢ to $310.50 a short ton, and soy oil fell 0.04¢ to 31.79¢ a pound.

Corn futures lost ½¢ to $3.64¼ a bushel in Chicago.

Wheat futures for May delivery declined ½¢ to $4.29¼ a bushel, while Kansas City wheat added ¼¢ to $4.25¼ a bushel.

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2. Ethanol Production Falls to Four-Month Low as Inventories Jump to Record

Ethanol production dropped to the lowest level in four months last week while inventories jumped to a record.

Output of the biofuel in the U.S. declined 3.3% to 1.019 million barrels a day, on average, in the week that ended on March 31, according to the Energy Information Administration. That’s the lowest production level since November 25.

The four-week average declined, but only slightly, to 1.04 million barrels a day.

Inventories rose to 23.705 million barrels last week, the highest on record and an increase from 23.257 million seven days earlier, according to the EIA.

While declining production and record inventories may be bad news for corn farmers who grow the stock used to make ethanol, there is some good news out there.

Exports of the biofuel reached 138 million gallons in February, the third-highest monthly total on record, according to the Renewable Fuels Association. Brazil was the biggest buyer, taking 37% of all exports, while Canada accounted for 18%. India boosted imports of U.S. ethanol, almost doubling its take to 24.3 million gallons, the RFA said in a report.

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3. Frost Advisory Forecast For Kansas, Missouri; Snow Moving Through Upper Midwest

A frost advisory is forecast for the eastern half of Kansas and the western half of Missouri, as temperatures overnight into Friday are expected to be relatively cold.

Flood warnings are also in effect along the Missouri River and its tributaries near St. Joseph, Missouri, according to the National Weather Service.

Temperatures will drop as low as 30˚F. for several hours overnight, harming “sensitive” vegetation, the NWS said, though no damage to any winter wheat in the area is expected.

In the Upper Midwest, a large storm is bringing snow and wind through parts of Indiana, Michigan, and Ohio as it moves off to the east.

“A band of snow will move quickly east through the Fort Wayne area and into northwest Ohio early this morning,” the NWS said in a morning report. “Visibilities may lower to less than a mile briefly as the band moves through. Accumulation should be less than ½ inch. However, temperatures will be close to freezing, so a few slick spots may develop.”

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