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3 Big Things Today, June 1

Corn, Soybeans Little Changed Overnight; U.S. Exit From Paris Accord May Not Impact Ethanol.

1. Corn, Soybeans Little Changed as Investors Unsure About Crop Progress, Quality

Corn and soybeans were little changed as, once again, investors aren’t sure which way to bet on the weather.

It’s rained a lot in the past two weeks in much of the Midwest, which has again put farmers behind the normal pace of planting. There are also widespread reports of necessary replanting in much of the Corn Belt due to the excessive rainfall.

That’s being offset by a short dry spell this week that may have allowed some farmers back into fields to finish seeding their corn or to accelerate soybean planting. Farmers are saying, however, that despite the dry weather, it’s still too muddy to plant.

Investors aren’t sure which way to turn, leading to some uneasiness in the markets.

Prices have been bobbing on either side of unchanged, as traders in Chicago are uncertain what will happen with the crop.

Corn futures for July delivery rose ¾¢ to $3.72¾ a bushel overnight on the Chicago Board of Trade.

Soybeans rose 2¢ to $9.18 a bushel in Chicago. Soy meal gained 80¢ to $298.90 a short ton, and soy oil added 0.12¢ to 31.46¢ a pound.

Wheat futures gained ½¢ to $4.29¾ a bushel in Chicago, while Kansas City futures rose 1¼¢ to $4.33 a bushel.

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2. President Expected to Opt Out of Paris Accord, But Does it Matter For Ethanol?

President Trump will let us all know today at 3 p.m. whether the U.S. will stay in the Paris Climate Accord, though most news reports indicate he will choose to opt out.

So what does that mean for farmers?

The first thing that comes to mind, and rightfully so, is ethanol. Biofuel companies plan to use 5.45 billion bushels of corn this year and 5.5 billion bushels next year to make ethanol in the U.S.

Bob Dineen, the head of the Renewable Fuels Association (RFA), said yesterday that he doesn’t think an exit from the Paris Accord will have much effect on ethanol production because the Renewable Fuel Standard (RFS) allows companies to invest in clean energy technology and reduce greenhouse emissions from transportation.

He said the ethanol industry will continue to fight climate change regardless of whether the U.S. is involved in the Paris Accord or not.

The Paris agreement went into effect in November and, at the time, had the backing of 195 nations. Leaving it would mean the U.S. would join only Syria and Nicaragua in not being a part of the climate accord that requires countries to submit a plan on how they would reduce greenhouse gas emissions.

The good news for the ethanol industry is, at the time, the U.S. didn’t include biofuels as part of its so-called Intended Nationally Determined Contributions (INDC) – the plan it submitted to show what it would do to reduce emissions – something the RFA bemoaned at the time.

“It’s frankly inexplicable that that U.S. has ignored the RFS in its INDC,” Dinneen said at the time.

Oddly, that omission may help the industry. If it wasn’t part of the U.S. contribution to the Paris Accord in the first place, then perhaps it won’t matter to ethanol makers whether the president decides to leave the agreement or not.

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3. Another Dry Day in Store For Much of Midwest With Only Slight Chance of Isolated Storms

It looks like another dry day in much of the Midwest as no rain is forecast for much of Iowa and Illinois, according to the National Weather Service.

There is a chance of thunderstorms, however, in far southwestern Iowa today, though it appears the storms will be isolated but possibly severe. The chance of storms increases starting tomorrow into the weekend.

Despite the dry weather, flooding is still a problem along the Mississippi River, especially near Cape Girardeau, Missouri. Water levels continue to fluctuate in the region, and flooding is expected to develop at the Grand Chain Dam in Illinois today, but levels should fall back below flood stage tonight.

Minor flooding is expected to continue into early next week, the NWS said.

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