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3 Big Things Today, April 7, 2022

Soybean Futures Rise Overnight; Ethanol Output Drops to Five-Week Low.

1. Soybean Futures Higher in Overnight Trading

Soybean futures were higher amid increasing demand for cooking oils and on potential for dry weather in South America.

Cooking oil demand may increase amid disruptions to sunflower seed oil supplies coming out of Ukraine as Russia’s attacks on the country continue.

Buyers who can’t get sunflower seed oil may seek an alternative such as palm or soybean oil.

Russia’s attacks on Ukraine have not relented, and Kyiv is asking NATO countries for more weapons as the conflict enters its 43rd day, according to media reports.

The World Health Organization said it’s making plans for “different situations” that may arise including mass-casualty events and chemical attacks.

Ukraine also is seeking more sanctions on Russia, but Russian officials insist the sanctions will not work.

On the weather front, moisture stress likely will hurt late soybean filling in Argentina, but may lend a hard with early bean and corn harvests, Commodity Weather Group said in a report.

Rains in the next two weeks likely will benefit southern corn-growing areas of Brazil, but declining precipitation in northern regions could lead to “spotty” stress, the forecaster said.

Russia is the world’s largest exporter of wheat, while Ukraine is now forecast to be the fourth-largest, according to the U.S. Department of Agriculture.  

Soybean futures for May delivery rose 3¼¢ to $16.22¾ a bushel overnight on the Chicago Board of Trade. Soymeal fell 40¢ to $461.40 a short ton, while soybean oil futures jumped 0.33¢ to 72.16¢ a pound.

Corn futures fell 2½¢ to $7.54½ a bushel. 

Wheat for May delivery dropped 1½¢ to $10.36¾ a bushel while Kansas City futures lost 3¾¢ to $10.81¼ a bushel.

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2. Ethanol Production Falls to Five-Week Low

Ethanol output dropped to the lowest level in five weeks and inventories declined in the seven days that ended on April 1, according to the Energy Information Administration.

Production of the biofuel fell to 1.003 million barrels a day, on average, the EIA said in a report.

That’s down from 1.036 million barrels a week earlier and is the lowest since the week that ended on February 25, the agency said.

In the Midwest, by far the biggest producing region, output averaged 946,000 barrels a day, down from 982,000 barrels the previous week.

West Coast output declined to an average of 7,000 barrels a day from 8,000 barrels, the EIA said.

East Coast production was unchanged at 12,000 barrels a day, and Rocky Mountain output was at 15,000 barrels a day for the second straight week.

Gulf Coast production, meanwhile, was the sole gainer, rising to 23,000 barrels a day, on average, from 19,000 barrels a week earlier, the government said.

Ethanol inventories fell to 25.903 million barrels in the seven days through April 1.

That’s down from 26.529 million barrels a week earlier and marks the lowest level since March 4, the EIA said in its report.

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3. Dry, Windy Weather to Continue in Central U.S.

Dry, windy conditions continue in much of the central U.S. today as red-flag and high-wind warnings remain in effect, according to the National Weather Service.

In central Kansas, winds will be sustained from 30 to 35 mph with gusts of up to 45 mph, the NWS said in a report early this morning.

Relative humidity will fall as low as 23%.

In the Oklahoma and Texas panhandles, winds will gust up to 60 mph today, while humidity is forecast to drop as low as 10%, the agency said.

In northwestern Iowa, meanwhile, advisories are in effect until late tonight as winds will be sustained from 20 to 30 mph with gusts of up to 40 mph, the NWS said.

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