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3 Big Things Today, September 9

Corn, Soybeans Mixed Overnight; Ethanol Production, Stockpiles Down as Driving Season Ends.

1. Corn, Soybeans Mixed Overnight as Investors Weigh Rain, Bumper Crops

Corn and soybean futures were little changed overnight, as traders weigh excessive rainfall that’s inundated fields with floodwaters and led to fungal diseases against what most expect will be record harvests for both crops.

Fungal diseases (including sudden death syndrome in soybeans) have been reported in several states, and flooded fields have been a problem for weeks as rains persist in the region. The six- to 10-day forecast is now calling for drier weather in most of the Midwest, but the 11- to 15-day is wetter, according to Commodity Weather Group.

Still, bumper harvests are reportedly on the way. The U.S. Department of Agriculture estimated in August that growers would collect 15.2 billion bushels of corn on yields of 175.1 bushels an acre, and 4.06 billion bushels of soybeans with yields of 48.9 bushels an acre. The USDA will update its estimates on Monday.

The Pro Farmer Crop Tour pegged corn harvest at 14.7 billion bushels on yields of 170.2 bushels an acre and soybean output at 4.09 billion bushels on yields of 49.3 bushels an acre.

Corn futures for December delivery fell 1¼¢ to $3.37¼ a bushel overnight on the Chicago Board of Trade.

Soybeans for November delivery rose 2¼¢ to $9.79 a bushel, soy meal futures for December delivery fell 20¢ to $317.40 a short ton, and soy oil added 0.22¢ to 33.49¢ a pound.

Wheat futures for December delivery declined 2¢ to $4.04 a bushel overnight in Chicago, while Kansas City futures lost 1¼¢ to $4.16¾ a bushel.

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2. Ethanol Production Falls Fourth Straight Week as Summer Driving Season Ends

Ethanol production fell for a fourth straight week as the summer driving season comes to an end, effectively reducing demand for the additive.

Production in the week that ended on September 2 averaged about 998 barrels a day, the lowest level since the seven days that ended July 22, the U.S. Energy Information Administration said in a report. Stockpiles, meanwhile, also declined, falling 1.3% to a three-week low, the EIA said.

While that’s good news for ethanol prices and, in turn, ethanol producers, it’s bearish for corn producers, as it means a major source of demand is reducing purchases of the grain.

The USDA has said that ethanol-makers will use 5.275 billion bushels of corn to produce the biofuel in the 2016-2017 marketing year, up from 5.2 billion the prior 12 months. Whether that changes in Monday’s WASDE report remains to be seen.

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3. Weather Maps Show More of the Same as Flooding Continues

It’s more of the same on the weather maps this morning – flash flood warnings, flood advisories, and hazardous weather outlooks.

Flood advisories, watches, and warnings have been declared in a large chunk of land that encompasses the southeastern quadrant of Kansas all the way across Missouri into Illinois, National Weather Service maps show. Rainfall has inundated rivers and streams, flooding roads and farm fields in several areas, including Wichita, Kansas.

As much as 4 to 6 inches of rain have already fallen in the region and more is expected.

“Major flash flooding is occurring in and around Mulvane (Kansas),” the NWS said. “This is a dangerous situation. Many roads have been barricaded, and several buildings in Mulvane are flooded. Excessive runoff from heavy rainfall will continue to cause flash flooding of small creeks and streams, urban areas, highways … as well as other drainage areas and low-lying spots.”

Thunderstorms also are expected in parts of northeastern Illinois and northwestern Indiana, where winds may reach up to 60 mph, and excessive rain may cause “limited” flooding risk, the NWS said. Storms also will continue in much of eastern Iowa and western Illinois.

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