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3 Big Things Today, August 4, 2022

Soybeans, Corn Lower Overnight; Ethanol Production Jumps Week-to-Week

1. Soybeans, Corn Modestly Lower Overnight

Soybean and corn futures were slightly lower in overnight trading while wheat as a touch higher as investors weigh hot weather in the U.S. against improved prospects for production in Ukraine.

Extremely hot weather expected to hit triple digits in several areas of the Midwest ranging from western South Dakota and Nebraska to Kansas, Oklahoma and Missouri is underpinning prices this morning.

Much of the Dakotas, eastern Nebraska, Iowa and northern Illinois have seen little or no rain in the past week, according to the National Weather Service's precipitation page.

Still, western Kansas, most of Oklahoma and Arkansas and the southern half of Illinois have seen ample precipitation in the past seven days, the NWS said.

About 61% of the U.S. corn crop was in good or excellent condition as of Sunday with 26% now in the dough stage, the Department of Agriculture said in a report on Monday.

Sixty percent of soybeans earned top ratings, with 44% now setting pods, the USDA said. Seventy percent of spring wheat in the U.S. was in good or excellent condition at the start of the week.

In Ukraine, meanwhile, the government raised prospects for this year's agricultural production to 65 million to 67 million metric tons. That's up from a prior outlook for 60 million tons.

While increased production may be welcomed amid several food crises globally, getting the grains and oilseeds out of Ukraine is proving difficult.

Despite an agreement allowing cargo carriers to haul grain out of Ukrainian ports, only one ship has sailed.

The Razoni, loaded with 26,000 metric tons of corn, was the first and thus far only ship to make its way out of the Ukraine port of Odesa. More than 20 million metric tons of grains are still awaiting export from the country.

Soybean futures for November delivery fell 3¢ to $13.64 ¾ a bushel overnight on the Chicago Board of Trade. Soymeal rose $1.40 to $399.50 a short ton, while soybean oil futures declined 0.64¢ to 60.36¢ a pound.

Corn futures for December delivery were down 2¢ to $5.94 1/4 a bushel.

Wheat for September delivery rose 1¢ to $7.64 ¾ a bushel while Kansas City futures added a penny to $8.36 ½ a bushel.

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2. Ethanol Production Surges to Highest in Four Weeks

Ethanol output jumped to the highest level in four weeks while inventories increased slightly, according to data from the Energy Information Administration.

Production of the biofuel rose to an average of 1.043 million barrels a day in the week that ended on July 29, the EIA said in a report.

That's up from 1.021 million barrels a day the previous week and the highest output since the seven days that ended on July 1.

In the Midwest, by far the biggest producing region, output averaged 984,000 barrels per day, up from 962,000 barrels a week earlier and also the highest in four weeks, the agency said.

In the Gulf Coast, production increased to 25,000 barrels per day, on average, from 23,000 barrels.

The was the entirety of the gains as East Coast output was unchanged at 12,000 barrels a day for the third straight week and Rocky Mountain production remained at 15,000 barrels a day for the fourth consecutive week, the EIA said.

West Coast output dropped to 7,000 barrels per day, on average, after spending nine straight weeks at 9,000 barrels a day.

Ethanol stockpiles, meanwhile, rose modestly to 23.394 million barrels a day in the week through July 29.

That's up from 23.328 million barrels a day the previous week, the EIA said in its report.  

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3. Heat Warnings Issued For Parts of South Dakota, Nebraska

Excessive heat warnings and heat advisories have been issued for parts of southwestern South Dakota and the Nebraska panhandle amid extremely hot weather, according to the National Weather Service.

Temperatures in the area will rise as high as 105 degrees in the daytime over the next couple of days with lows only getting down into the mid-70s overnight, the NWS said in a report.

An excessive heat warning will take effect in Dawes County, Nebraska, at noon today and last through 9 p.m. tomorrow.

In the surrounding areas, temperatures will hit 100 degrees in the daytime, the agency said.

Heat advisories also are in effect from central Kansas, where heat indexes are forecast to hit 105 degrees tomorrow, through central Texas starting tomorrow morning, the NWS said.

Storms are rumbling through southern Missouri into western and central Illinois this morning, causing flooding in some counties.

"Excessive runoff may result in flooding of rivers, creeks, streams and other low-lying and flood-prone locations," the agency said. "Flooding may occur in poor-drainage and urban areas."

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