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3 Big Things Today, May 11

Soybeans, Wheat Higher Overnight; Ethanol Production Tops 1M Mark First Week in Five

1. Soybeans Rise on WASDE Report, Wheat Higher Amid Concerns About HRW Crop

Soybeans rose and wheat futures saw modest gains in overnight trading, though corn declined slightly.

Soybeans rose after the U.S. Department of Agriculture reported domestic inventories at the end of the marketing year on Aug. 31 at 435 million bushels, just missing forecasts for 438 million bushels.

The World Agricultural Supply and Demand Estimates report (WASDE) was mostly uneventful with inventories, at least those in the U.S., coming in near expectations.

Corn carryout was pegged by the USDA at 2.29 billion bushels vs. forecasts for 2.33 billion, and wheat stockpiles were seen at 1.15 billion bushels, just shy of the 1.16 billion consensus.

Wheat futures kept their bid overnight on concerns about the hard-red winter crop, which was hit by a snowstorm the weekend of April 29-30. Growers hopefully will know soon how much damage was caused by widespread, heavy snow.

Soybean futures for July delivery rose 3¾ cents to $9.74 a bushel overnight on the Chicago Board of Trade. Soy meal added 50¢ to $318.20 a short ton, and soy oil futures gained 0.28¢ to 32.57¢ a pound.

Wheat futures for July delivery gained 1¾ cents to $4.33½ a bushel in Chicago. Kansas City futures rose 1¼ cents to $4.40½ a bushel.

Corn futures lost ½cent to $3.73¼ a bushel in overnight trading.


2. Ethanol Production Tops 1 Million-Barrel Mark First Time Since March

U.S ethanol production topped the million-barrel-a-day mark for the first time in five weeks and stockpiles declined, following crude inventories, in the week that ended May 5, according to the Energy Information Administration.

While the agriculture world was focused on the World Agricultural Supply and Demand Estimates (WASDE) report from the Department of Agriculture, the Energy Information Administration (EIA) said production of ethanol totaled 1.006 million barrels a day, on average, last week, the most since March 31.

The total was a rebound from the prior week’s 986,000-barrel average, which was the tied for the lowest production level since October.

Inventories of the biofuel fell to 23.055 million barrels, down from 23.213 million seven days earlier, according to the EIA.

That follows crude oil stockpiles that unexpectedly declined the most since December amid falling imports. That in turn gave oil prices a boost. Still, oil production rose to the highest level since August 2015, which likely will put a cap on crude futures, analysts said.

Gasoline stockpiles declined by 150,000 barrels, though that was well below the expected drawdown.

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3. Rainfall Expected to Cause Ponding in Southern Plains, More on the Way

Severe weather is forecast to continue after storms belted the southern Plains overnight.

Some ponding is expected after rain fell last night in the region where hard-red winter wheat is trying to get its footing after a late-April snowstorm. Showers and thunderstorms are expected again today as a weather system moves across the area, according to the National Weather Service.

The good news for farmers is that the added moisture may help finish out some crops in the southern Plains, and a dry spell is on the way that should last into early next week, the NWS said.

Rain isn’t what is needed in the Midwest, but it looks like more is on the way to already-flooded parts of the Corn Belt, the NWS said. Storms are expected today in parts of Illinois and Indiana but are expected to subside this evening.

Flooding is rampant in several states in the Midwest, which thus far has kept growers from getting their corn into the ground.

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