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3 Big Things Today, January 20

Soybeans Lower in Overnight Trading; Ethanol Production Rises to Another Record.

1. Soybean Futures Lower as Dollar Value Rises Third Straight Day

Soybeans were lower in overnight trading as the value of the dollar rises ahead of the inauguration of President-elect Donald Trump.

The greenback was up 0.3% in early trading, heading higher for a third straight day against a basket of global currencies including the euro and yen. A stronger dollar essentially makes U.S. products more expensive for overseas buyers.

Still, its value is still relatively low after earlier this week dropping to the lowest value since December 7.

Corn and Chicago wheat were little changed, while Kansas City wheat declined.  

Soybean futures for March delivery fell 6¢ to $10.64¼ a bushel overnight on the Chicago Board of Trade. Soy meal futures lost $2.60 to $345.60 a short ton, and soy oil declined 0.04¢ to 35.40¢ a pound.

Corn futures fell ¼¢ to $3.66 a bushel.

Wheat for March delivery lost ½¢ to $4.23 a bushel in Chicago, while Kansas City futures dropped 3¢ to $4.39¼ a bushel.

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2. Ethanol Production Rises to Record-High Third Consecutive Week

Those worried about demand for U.S. corn from overseas buyers may be overlooking the fact that their friendly neighborhood ethanol plant may instead need supplies.

Ethanol production rose to a record for the third straight week in the seven days that ended on January 13, according to the Energy Information Administration.

Manufacturers of the biofuel produced 1.054 billion barrels a day, on average, last week, the EIA said in a report on Thursday. That’s up more than 7% year over year, government data show. Stockpiles also rose for a third week, though not close to a record amount, indicating strong consumption.

While the increase in ethanol production to new records every week for the past three is a bit of surprise, perhaps it shouldn’t be. The Renewable Fuel Standard requires that 19.28 billion gallons of the biofuel be blended into gasoline in 2017, up from 18.11 billion last year, according to the EPA.

How the incoming administration – today is Inauguration Day for President-elect Trump – handles the RFS has yet to be seen. Outgoing Agriculture Secretary Tom Vilsack said in November that the RFS is “solid” because it’s too intertwined in the fabric of the Midwest to get rid of.

Trump has been somewhat noncommittal on the issue, saying in a speech in Iowa during his campaign that the U.S. should increase ethanol mandates, then in September putting out a report calling for removal of blending credits. That language was later removed from the report.

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3. Flood Warning Issued For Much of Central Indiana; Wisconsin Gets Freezing Rain

A flood warning has been issued for nearly all of central Indiana as heavy rain likely will lead to several rivers breaching their banks, according to the National Weather Service.

The warning stretches from Logansport south all the way past Vincennes, Indiana, along the Illinois border. It also stretches east to Muncie and again south almost to Madison.

As much as an inch of rain has already fallen in the area, and more is expected in the 12 counties affected by the storm, the NWS said.

In parts of northern Wisconsin, a freezing rain advisory has been issued. The storm is pelting parts of the state, with Wausau at the center of the action, according to the agency. Travel is not advised as roadways are likely to be extremely slippery.  

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