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3 Big Things Today, April 12

Wheat Futures Lower in Overnight Trading; Weekly Ethanol Output, Stocks Decline.

1. Wheat Futures Fall Overnight on Rising Domestic, Global Inventories

Wheat futures fell to the lowest level in four sessions on rising inventories and as investors, who had bullish bets on the grain, sell their contracts and book profits.

The USDA on Tuesday raised its outlook for both domestic and global inventories of the grain.

U.S. stockpiles at the end of the 2017-2018 marketing year that ends on May 31 were pegged at 1.064 billion bushels, up from a prior outlook for 1.034 billion bushels, as feed use was projected lower.

Global inventories were seen at 271.2 million metric tons, up from the March forecast for 268.9 million tons, the USDA said.

That’s likely prompted investors who’d made bullish bets on wheat due to dry weather in the Southern Plains and extremely cold weather recently in the eastern Midwest to sell their contracts and liquidate their long positions.

Wheat for May delivery dropped 10¢ to $4.77¼ a bushel overnight on the Chicago Board of Trade. Kansas City futures lost 12½¢ to $5.04¼ a bushel.

Corn futures lost 1½¢ to $3.85½ a bushel overnight.

Soybean futures for May delivery rose 2¢ to $10.49¾ a bushel in Chicago. Soy meal fell $1.70 to $378.50 a short ton, and soy oil declined 0.03¢ to 31.50¢ a pound.


2. Weekly Ethanol Output, Stockpiles Decline; President Considering Higher Ethanol Blends

Ethanol production and inventories both declined slightly in the week that ended on April 6, according to the Energy Information Administration.

Output last week totaled 1.034 million barrels a day, on average, down from the prior week’s 1.038 million, the EIA said. The total was the lowest in almost a month.

Stockpiles, meanwhile, dropped to the lowest level since November. Inventories last week were reported at 21.846 million barrels, down from 22.425 million seven days earlier, according to the Energy Department.

In other ethanol news, President Trump is considering allowing sales of fuel with higher blends of ethanol in the summer to calm concerns from farmers who are worried about the direction of U.S. biofuels policy, Reuters reported.

Trump has in recent weeks attempted to find a way to placate the oil industry who says the Renewable Fuel Standard is too expensive for them. Refiners who don’t have the capacity to blend on their own have to buy and are pushing lawmakers for a cap on RINs. Economists have said a cap on RIN prices will hurt corn.  

The president is trying to find a way to assuage concerns from both the oil industry and the agricultural industry as he’s made big promises to both.


3. Winter Weather Persists in Northern Plains, Drought Continues in Southern Plains

The cold winter weather in the Northern Plains and dry, windy weather in the Southern Plains don’t appear to be going anywhere.

A blizzard warning will be in effect for parts of South Dakota and a few counties in northern Nebraska heading into the weekend, according to the National Weather Service. Winds gusts of up to 50 mph are forecast along with localized snowfall of as much as 18 inches.

The blizzard warning extends from 6 a.m. Friday through 6 a.m. Saturday.    

Meanwhile, winter storm warnings, high wind warnings, and winter weather advisories are all in effect for much of Montana, parts of North Dakota, and most of Nebraska.

Farther south, a red-flag warning is still in effect for much of the Southern Plains stretching from northern Colorado east into Kansas and south into West Texas.

In the Oklahoma and Texas panhandles, wind gusts of up to 50 mph are expected today with relative humidity as low as 5%, according to the NWS. Temperatures in the region will reach the mid-90s, the warmest this year.

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