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3 Big Things Today, January 12

Grains, Beans Little Changed Overnight; Ethanol Output Rises to Another Record.

1. Grains, Beans Mixed in Overnight Trading Ahead of WASDE

Corn and beans were mixed ahead of today’s World Agricultural Supply and Demand Economics (WASDE) Report.

U.S. production likely will be little changed since the last report in December, as the Department of Agriculture is expected to leave things pretty much as they were. The department, however, is expected to increase its outlook for Brazilian production of both corn and beans, and raise its estimate for corn production in Argentina, according to market watchers.

The USDA also will release its December 1 grain stocks, which will probably show that inventories at the start of last month rose from the same date in 2015. For now, however, traders seem to be sitting on the sidelines waiting for the data, wary of any surprises from the government.

Corn futures for March delivery fell 1¢ to $3.56¼ a bushel overnight on the Chicago Board of Trade.

Soybeans rose ¾¢ to $10.12¼ a bushel in Chicago. Soy meal futures gained 50¢ to $315.40 a short ton, and soy oil futures fell 0.10¢ to 35.90¢ a pound.

Wheat for March delivery in Chicago lost 1¾¢ to $4.17 a bushel, and Kansas City futures declined 4¢ to $4.27¾ a bushel overnight.  

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2. Ethanol Production Rises to New Record as Gas Prices Forecast to Climb

Ethanol production in the U.S. rose to a record high in the week that ended on January 6, the Energy Department said in a report.

Output averaged 1.049 million barrels a day, rising to another weekly record after increasing to 1.043 million barrels, the Energy Information Administration said. The four-week average also edged higher to a record 1.039 million barrels a day, on average, up from 1.037 million the prior week, according to the EIA.

Ethanol production has been on the rise as demand increases, led by slowly rising fuel prices. Gas prices are expected to increase to about $2.31 a gallon in the first quarter of 2017 from $2.25 a gallon in December, the EIA said in a separate report. For the full year, gas prices are expected to jump to $2.38 a gallon and $2.41 a gallon in 2018, the agency said.

Brent crude oil, the global benchmark, is expected to average $53 a barrel in 2017 and $56 a barrel in 2018, while U.S. standard West Texas Intermediate futures are pegged at about $1 less than Brent, the EIA said.

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3. Ice Storms Expected Today in Southern Plains, Upper Midwest

A winter storm watch is in effect for much of the Southern Plains including southwestern Kansas and the Oklahoma and Texas panhandles.

“Conditions are coming together for a freezing rain event from the Southern Plains to Mid-Atlantic starting Thursday night and lasting through Saturday,” the National Weather Service said in a statement on Thursday morning.

Ice accumulations of a quarter of an inch are expected with the potential for more, the NWS said. That will make driving “extremely dangerous” due to slick roadways.

Freezing rain also is a problem in much of the Upper Midwest including much of northern Illinois, Indiana, and southern Michigan, according to weather maps. Ice accumulations of up to a tenth of an inch are expected, mostly south of Interstate 88, the NWS said.

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