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3 Big Things Today, August 30

Wheat Again Higher Overnight; Ethanol Production Falls First Time in a Month.

1. Wheat Higher Overnight on Concerns About Russian Supply

Wheat futures are looking for their third straight gain on Thursday, rebounding from six consecutive losses, amid concerns over Russia’s supply.

Reports have indicated that the Russian government may implement export limits on the grain due to a reduction in output due to adverse weather. The government has denied that, but even the hint of export limits has riled markets.

Russia’s IKAR consultancy earlier this week lowered its estimate of the country’s wheat crop to 69.6 million metric tons from a prior projection of 70.8 million tons. 

The USDA earlier this month pegged global output at 729.6 million metric tons, down from a prior outlook for 736.3 million tons, lowering production prospects in the European Union by 8 million tons.

The potential for less available supply comes as Egypt purchased 350,000 tons of wheat, including 290,000 tons from Russia and 60,000 tons from Ukraine.

Wheat futures for December delivery rose 3½¢ to $5.45¼ a bushel overnight on the Chicago Board of Trade. Kansas City futures added 4¼¢ to $5.53½ a bushel.

Corn gained 2¢ to $3.58½ a bushel in Chicago.

Soybean futures added 4½¢ to $8.40½ a bushel overnight. Soy meal futures gained 80¢ to $306 a short ton, and soy oil added 0.14¢ to 28.56¢ a pound.

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2. Ethanol Production Falls First Time in Almost a Month, Stockpiles Also Decline

Ethanol production in the week that ended on August 24 fell for the first time in almost a month while stockpiles declined.

Output of the corn-based biofuel declined to an average of 1.07 million barrels a day, down from 1.072 million a week earlier and the lowest amount since the seven days that ended on July 27, according to the U.S. Energy Information Administration.

Declines in the Gulf Coast and Rocky Mountain regions, which combined fell by about 9 million barrels a day on average more than offset gains in the Midwest, the EIA said in a report.

Ethanol stockpiles, meanwhile, fell to 23.061 million barrels from 23.259 million a week earlier, the first decline since the seven days that ended on July 20, government data show.

Agriculture Secretary Sonny Perdue told attendees at the annual Farm Progress Show in Boone, Iowa, that he had talked to President Trump who wants plants for E15 to be sold year-round.

Perdue said he received a call right before arriving at the expo from the president who’d indicated that he wanted to “get this RFS (Renewable Fuel Standard) straightened out.”

Former EPA Administrator Scott Pruitt, who resigned after myriad scandals, seemed reluctant to change the RFS to allow year-round offerings of E15.  Andrew Wheeler, the acting administrator of the agency, is more open to the idea, even meeting with producers and ethanol groups during a visit to the Iowa State Fair.

In other news, the USDA will release its Weekly Export Sales Report this morning. Analysts expect sales of new-crop corn at 700,000 to 1.3 million metric tons, soybean sales of 500,000 to 1.25 million tons, and wheat sales from 200,000 to 500,000 tons, according to Allendale.

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3. Flooding Still a Problem in Southern Wisconsin; Warnings Issue in Southwestern Missouri

Flooding is still an issue in parts of Wisconsin as warnings have been issued in several counties in the southern half of the state.

Rivers and streams in the area have breached their banks due to heavy rains recently, and there’s another chance for thunderstorms Friday through Wednesday, according to the National Weather Service.

Damaging winds, large hail, and more heavy rainfall are the biggest hazards with the upcoming storms, the NWS said in a report early Thursday morning.

Farther south, parts of extreme southwestern Missouri are under a flash flood watch as “excessive rainfall” is possible today.

“Thunderstorms containing high rainfall rates are expected to begin pushing into the area toward morning and continuing through the afternoon hours,” the NWS said. “Very efficient rain-producing storms are expected and … flash flooding will be possible.”

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