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3 Big Things Today, August 18, 2022

Grains, Soybeans Lower Overnight; Ethanol Output Falls to Three-Month Low

1. Grain and Soybean Futures Drop in Overnight Trading

Wheat futures plunged as more grain moves out of Ukraine and soybeans dropped on rainy weather in parts of the Midwest.

About 25 ships hauling agricultural products have sailed from Ukrainian ports even as the country remains under siege from Russian forces. A weeks-old agreement to allow grain ships through blockades to relieve food crises globally is holding with more ships leaving port cities.

One ship -- the Belize-flagged I Maria -- sailed from Chornomorsk port Thursday, Reuters reported, citing Turkey's Defense Ministry.

Soybeans and corn, meanwhile, were down as some areas of the U.S. Midwest likely will get much-needed rain heading into the weekend.

As much as 3 inches of rain is expected to fall in parts of southern Missouri and northern Arkansas as storms rumble through the region, according to the National Weather Service's precipitation page.

Southwestern Missouri is suffering from severe to extreme drought, U.S. Drought Monitor data show. An extreme drought is indicated by crop losses, limited water supplies and water restrictions, the monitor said.

With showers expected in the northwestern Midwest today and tomorrow then east from there into early next week, stress from a lack of precipitation will narrow from 30% to less than 25% of corn and soybean areas, Commodity Weather Group said in a note to clients yesterday.

For wheat, impacts from dry weather will wane as the spring harvest continues along the Canadian border, the forecaster said. In the southern Plains, moisture is expected to improve ahead of winter planting, CWG said.

Wheat for December delivery dropped 17¢ to $7.63 ½ a bushel overnight on the Chicago Board of Trade while Kansas City futures lost 19 1/2¢ to $8.33 ½ a bushel.

Soybean futures for November delivery declined 10 1/4¢ to $13.79 ¼ a bushel. Soymeal was up $1.10 to $401.70 a short ton, while soybean oil futures fell 0.79¢ to 64.81¢ a pound.

Corn futures for December delivery were down 5 1/4¢ to $6.06 ¾ a bushel.

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2. Ethanol Production Falls to Three-Month Low

Ethanol output last week dropped to the lowest level in more than three months while inventories increased, according to data from the Energy Information Administration.

Production of the biofuel plunged to an average of 983,000 barrels a day in the week that ended on Aug. 12, the EIA said in a report.

That's down from 1.022 million barrels a day on average the previous week and the lowest output since the week that ended on April 29.

In the Midwest, by far the biggest producing region, output fell to an average of 926,000 barrels a day, down from 965,000 barrels a week earlier and also the lowest since late April, the government said.

Rocky Mountain production fell to 13,000 barrels per day on average from 14,000 barrels the previous week. That marks the lowest output for the region since May 6.

That was the entirety of the losses for the week as East Coast production was unchanged at 12,000 barrels per day for the fifth straight week, the EIA said.

Gulf Coast production rose to an average of 23,000 barrels per day, up 1,000 barrels from the previous week, and West Coast production increased to 9,000 barrels a day, on average, the agency said.

Ethanol stockpiles, meanwhile, rose to 23.446 million barrels in the seven days that ended on Aug. 12.

That's up from 23.256 million barrels a week earlier and the largest inventory level since July 15, the EIA said in its report.

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3. Strong Storms Possible in Parts of Eastern Nebraska, Western Iowa

Some potentially strong thunderstorms are expected to roll through parts of eastern Nebraska and western Iowa this afternoon, according to the National Weather Service.

Wind gusts of up to 65 miles an hour and hail as large as half-dollars are the biggest threats associated with the system, the NWS said in a report early this morning.

Storms are expected to stick around through at least tomorrow with only small hail and gusty winds expected.

Further south, precipitation is expected in parts of eastern Oklahoma today before skies clear, the agency said. Unsettled weather is forecast for next week.

"A cold front is forecast to move into the area on Saturday and stall across southeast Oklahoma Sunday," the NWS said. "This boundary will provide the focus for several rounds of showers and storms over the weekend into early next week."

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