3 Big Things Today, June 8
1. Corn, Soybeans Rise Overnight as Traders Start to Worry About Dry Weather
Corn and soybeans rose in overnight trading amid concerns that the hot, dry weather pattern originally forecast for July and August in starting a bit early.
Traders who were worried about too much rain a few weeks ago are now concerned about whether the weather will turn hot and dry.
Little or no rain has fallen in a wide patch of the Midwest stretching from North Dakota through Illinois for the past 14 days, according to the National Weather Service.
A warm, dry pattern for at least the next several days will help growers finish seeding, but moisture is “slipping” in much of the Northern Plains and central and western Midwest, Commodity Weather Group said in a report.
A hot, dry trend in the next six to 10 days with temperatures in the 90s Saturday through Tuesday in the central and northwestern Midwest and near 100˚F. in South Dakota has traders and hedgers worried about the recently planted crop.
Still, the ground isn’t in danger of drying out soon. Topsoil moisture in Iowa is 91% surplus or adequate after weeks of rainfall that slowed planting. In Illinois, 92% of the topsoil earned top ratings. Subsoil moisture was a whopping 97% and 96% surplus or adequate in Iowa and Illinois, respectively, according to the Department of Agriculture.
Corn futures for July delivery rose 4¢ to $3.88¾ a bushel overnight on the Chicago Board of Trade.
Soybeans gained 9¢ to $9.39¾ a bushel in Chicago. Soy meal added $3.60 to $308.50 a short ton, and soy oil rose 0.11¢ to 31.47¢ a pound.
Wheat futures for July delivery gained 4¢ to $4.48¾ a bushel overnight on the Chicago Board of Trade. Kansas City wheat added 4¾¢ to $4.50¾ a bushel in Chicago.
2. Ethanol Production, Stocks Decline, Annual Summer Ozone Season Begins to RFA’s Lament
Production of ethanol fell below the 1 million-barrel-a-day mark for the first time in five weeks in the seven days through June 2, while stockpiles dropped below 22 million barrels for the first time since January.
Ethanol output last week fell to 999,000 barrels a day, on average, after staying above 1 million every week since late April, the Energy Information Administration said in a report.
Stockpiles of the biofuel in the U.S. dropped to 21.982 million barrels, the lowest level since the week that ended on January 27, according to the EIA.
The Renewable Fuels Association (RFA) is lamenting the start of the so-called Summer Ozone Season that effectively prevents fuel stations from selling E15 (gas that contains 15% ethanol) in several states.
The EPA in 2011 approved use of E15 but didn’t grant a waiver for the Reid Pressure Valve that’s available to E10 blends. To use E15 in certain areas, retailers would have to secure sub-RVP blends to start selling E15 during the summer season that lasts from June 1 to September. 15, the RFA said. Such gasoline blends are generally unavailable in conventional gasoline areas and would be uneconomical to ship.
The RFA said the rule is arbitrary, protects the status quo, and denies access to E15 year round.
“Unfortunately, (June 1) begins yet another summer of limited options and higher prices at the pump for American drivers,” RFA President Bob Dinneen said in a statement. “In the end, EPA’s actions are punishing consumers who are being denied access to the cleanest, lowest cost, and highest source of octane fuel on the planet.”
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3. Midwest Hot, Dry With Best Chance of Precipitation in Nebraska Thursday
It’s another dry, warm day in the Midwest, which likely will help many farmers finish seeding their crops.
The weather has turned hot and dry in the past couple weeks, with Iowa and Illinois, the biggest growers of corn and soybeans, receiving little or no rain, according to the National Weather Service.
The best chance of rainfall today is in Nebraska, where isolated storms are forecast, the NWS said. Still, heat indexes of 100˚F. to 105˚F. will mitigate effects of rain even if it does fall.
The NWS said there’s also a “slight” chance of thunderstorms for parts of eastern Iowa and western Illinois tonight. No severe storms are expected anywhere.
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