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3 Big Things Today, January 26

Corn, Beans Lower in Overnight Trading; Ethanol Production Drops From Record

1. Corn, Soybeans Drop on Concerns About Trade

Corn and soybeans were modestly lower in overnight trading on concerns about demand from overseas buyers.

Investors are concerned about President Trump’s decision to leave the Trans-Pacific Partnership and to revamp the North American Free Trade Agreement. The worry, analysts said, is that overseas buyers will instead turn to South American sellers as world supplies are ample.

Some farm groups have said they were disappointed in Trump’s decision, as it will make selling to countries that had signed the agreements more difficult.

Corn futures for March delivery fell 1¾¢ to $3.64½ a bushel overnight on the Chicago Board of Trade.

Soybean futures declined 3¼¢ to $10.52 a bushel. Soy meal futures lost $1.30 to $342 a short ton, and soy oil fell 0.09¢ to 34.78¢ a pound.

Wheat for March delivery fell 1¼¢ to $4.23¼ a bushel in Chicago, while Kansas City futures declined 1½¢ to $4.36¼ a bushel.

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2. Ethanol Production Falls From Record in Week Ended January 20

Ethanol production in the week that ended on January 20 backed off of records for the first time in almost a month, according to the Energy Information Administration.

Producers put out an average of 1.051 million barrels a day last week, down from a record 1.054 million in the prior seven days, the EIA said in a report. The decline marks the first time production hasn’t been a record this year, according to the agency.

Stockpiles, meanwhile, rose for the third straight week. Inventories in storage totaled 21.728 million barrels, up from 21.115 million a week ago, EIA data show. That’s not good news, as it means production is outpacing use of the biofuel, a change from prior weeks.

Still, with output hovering near record levels (the week-over-week decline was merely 0.2%), demand for corn from ethanol producers is expected to remain strong.

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3. Flooding Expected Rest of Week in Parts of Illinois, Iowa, Missouri

The winter storm that hammered the Midwest the past few days has all but disappeared off the weather maps, replaced instead with flood warnings.

In north-central, northwest and west-central Illinois and parts of Iowa and Missouri, flooding is expected on several major and minor rivers and their tributaries, according to the National Weather Service.  

The Illinois River is forecast to flood in several spots after the excessive rain, ice, and snow that fell in the past few days, the NWS said in a report on Thursday morning.

In Havana, the river was at 15.7 feet on Wednesday night, well above flood stage of 14 feet. It’s expected to stay at those levels at least through Saturday, the agency said.

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