3 Big Things Today, August 5, 2020

Soybeans, Corn Higher Overnight; Grain Plains Revenue Drops 34% Annually

1. Soybeans and Corn Higher Overnight on Dry Weather

Soybeans and corn were higher in overnight trading as drought builds in parts of the Midwest with little rain forecast in some areas.

About 33% of Iowa was suffering from a moderate or severe drought as of July 28, up from 30% a week earlier, according to the U.S. Drought Monitor. Three months earlier, 0% of the state was seeing any sort of drought condition, the monitor said.

Iowa is a bit of an anomaly in that little to no rain has fallen in much of the state in the past 30 days, according to data from the National Weather Service.

Much of Nebraska, Minnesota, Missouri, and the southern three-fourths of Illinois have received ample precipitation in the past month, NWS data show.

Commodity Weather Group said central Iowa remains the most at-risk area for crop stress.

Capping price increases, however, are forecasts that showers in the Midwest will expand in the six- to 10-day outlook and only “diminish slightly” in the 11- to 15-day outlook, CWG said. Moisture will be “adequate” in most growing areas, the forecaster said.  

Soybean futures for December delivery rose 2½¢ to $8.84½ a bushel overnight on the Chicago Board of Trade. Soymeal added $1.40 to $292.80 a short ton, and soy oil fell 0.09¢ to 30.96¢ a pound.

Corn futures for December delivery rose 2¢ to $3.22¼ a bushel.

Wheat futures for September delivery added 2¼¢ to $5.10½ a bushel overnight while Kansas City futures gained 2¾¢ to $4.25 a bushel.

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2. Ethanol Producer Green Plains Q2 Revenue Falls, Benefits From Sanitizer Market

It’s been a tough year for ethanol producers as demand for gasoline declines amid the ongoing COVID-19 pandemic that’s kept drivers at home.

Production of the biofuel plunged to the lowest on record earlier this year before rebounding in the past couple of months. Output in the week that ended on July 24 jumped to the highest level since March, but that didn’t help one producer who saw its revenue plunge year-over-year.

Green Plains, the Omaha-based ethanol producer, said this week that revenue plunged almost 34% on an annual basis to $418 million in the company’s fiscal second quarter.

Ethanol sales totaled 149.9 million gallons in the second quarter, down from 224 million gallons during the same time frame a year earlier, the company said.

The company said it suffered a net loss of $8.2 million, or 24¢ per diluted share, during the quarter. Still, that was better than the $1.13-per-share loss in the previous year’s quarter.

The company, however, said costs of goods sold also declined, falling to $390.9 million, a 38% year-on-year drop.

Green Plains also benefited by producing hand sanitizer when supplies globally were running low due to the pandemic.

“Our results included a positive contribution from our York, Nebraska, biorefinery as we executed on a number of sales into the sanitizer and disinfectant markets,” Chief Executive Officer Todd Becker said in a statement. “Our proudest and most impactful initiative of the quarter came from our employees who led efforts to get cleaning products containing York’s high-quality alcohol into local communities through our donation program to help stop the spread of COVID-19.”

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3. Scattered Storms Expected in Parts of Southern Minnesota Today

Scattered thunderstorms are expected in parts of southern Minnesota today and tonight with some turning severe, according to the National Weather Service.

“Isolated severe storms will be possible in west-central and southwest Minnesota during the afternoon and early evening, with large hail and strong winds being the primary threats,” the NWS said in a report early this morning.

Starting tomorrow there’ll be more chances of rainfall heading into the weekend, though the odds of severe weather are low in the region.

A couple of isolated thunderstorms also are possible in parts of South Dakota today, the agency said.

There’s also the potential for more storms Friday through Monday in central South Dakota, some of which could turn severe on Friday night, the NWS said.

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