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3 Big Things Today, March 2

Soybean, Grain Futures Lower Overnight; Ethanol Stocks Rise to Highest in Almost a Year

1. Soybeans, Grains Slightly Lower Overnight on Profit-Taking

Soybeans and grains were lower in overnight trading as investors book profits after a price jump yesterday.

Bean futures closed 16 cents higher on Wednesday while corn was up more than 8 cents and wheat jumped 13 cents. Investors who were long the market, or had bet on higher prices, likely closed out positions and booked profits, analysts said.

Fundamentally not much has changed in the world overnight, leading some to believe the trade is mostly technical.

Soybean futures for May delivery fell 3 ¾ cents to $10.48 a bushel overnight on the Chicago Board of Trade. Soymeal futures declined 90 cents to $338.40 a short ton and soy oil lost 0.33 cent to 34.41 cents a pound.

Corn futures declined 1 ¼ cents to $3.80 ¾ a bushel in Chicago.

Wheat futures for May delivery fell 1 ¼ cents to $4.55 ¾ a bushel. Kansas City futures lost  a penny to $4.76 ¼ a bushel.

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2. Ethanol Stockpiles Jump to Highest Level in Almost a Year

Ethanol stockpiles last week rose to the highest level in almost a year while inventories were unchanged, according to the Energy Information Administration.

Inventories of the biofuel rose to 23.091 million barrels in the week the ended on Feb. 24, the EIA said in a report yesterday. That’s up from 22.669 million a week earlier and the highest level since March 4, 2016, according to EIA data.

Output of the biofuel was unchanged at an average of 1.034 million barrels a day, the agency said. That’s unchanged from the prior week and the lowest level since the week that ended on Dec. 23.

The ethanol industry was riled this week after billionaire Carl Icahn, who is the majority owner of an oil refinery, and the Renewable Fuels Association sent a proposal to the president that would shift the burden of blending ethanol into gasoline to the blenders in exchange for allowing them to sell 15% blends year-round.

While the deal was reportedly approved by Icahn, the RFA and Valero Energy, the chief executive of Poet, the second-biggest ethanol producer in the U.S., didn’t approve of the deal and said the RFA doesn’t speak for the entire industry.

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3. Dry Weather Increases Risks of Wildfires in Parts of Southern Plains

Dry weather is making for tinderbox-like conditions in the southern Plains as warm weather, strong winds and low humidity persist.

Conditions are “near critical” or “critical” in much of Oklahoma and western North Texas, just outside the panhandle but west of Interstate 35, according to the National Weather Service. The humidity is extremely low and conditions are expected to remain breezy, the NWS said.

The only relief in sight is a chance of thunderstorms starting on Sunday and lasting through Tuesday, according to the agency.

Elsewhere, there’s a chance for snow in parts of the upper Midwest along the Michigan-Indiana border today. Between 1 and 3 inches are possible in the area with lake-effect snow showers continuing into the night, the NWS said.

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