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3 Big Things Today, August 6, 2020
1. Soybeans and Corn Decline Overnight on Rain Chances
Soybeans and corn were lower in overnight trading as rain is expected in parts of the Midwest, which could give some areas a much-needed drink.
Storms are expected in central Iowa this morning and afternoon, according to the National Weather Service.
A third of the state is suffering from a moderate or severe drought in which crop losses are likely in some counties, according to the U.S. Drought Monitor. Three months ago, zero percent of the state was seeing drought conditions.
Little or no rain has fallen in much of central Iowa in the past 30 days, data from the NWS show.
The rainfall in Iowa will continue into Friday morning before diminishing, the agency said. Thunderstorms also are possible late Friday into the weekend.
Precipitation in the area is coming at a critical time as 59% of the soybean crop was setting pods at the start of this week while 85% was blooming, according to the U.S. Department of Agriculture.
About 39% of the corn crop was in the dough stage and 92% was silking as of Sunday, the USDA said.
Soybean futures for December delivery fell 2 3/4¢ to $8.76 a bushel overnight on the Chicago Board of Trade. Soymeal added $1 to $289.40 a short ton and soy oil fell 0.04¢ to 31.09¢ a pound.
Corn futures for December delivery lost 1¢ to $3.22 ¼ a bushel.
Wheat futures for September delivery declined 5¢ to $5.05 ¾ a bushel overnight while Kansas City futures fell 4 1/4¢ to $4.22 ¼ a bushel.
2. Ethanol Production Declines While Stockpiles Increase, EIA Says
Ethanol output fell for only the second time in several months while inventories climbed to the highest level in three weeks.
Production of the biofuel decreased to an average of 931,000 barrels a day in the week that ended on July 31, according to the Energy Information Administration.
That’s down from 958,000 barrels a day, on average, the previous week and only the second decline in more than three months, EIA data show.
In the Midwest, by far the largest producing region, output dropped to an average of 886,000 barrels a day from 909,000 barrels a week earlier.
East Coast production fell to an average of 12,000 barrels a day from 14,000 a week earlier, and Gulf Coast output declined to 15,000 barrels a day from 17,000 barrels, the agency said.
Rocky Mountain output, meanwhile, increased to 10,000 barrels a day from 9,000, and West Coast production rose to 9,000 barrels a day, on average, from 8,000 barrels during the previous week.
Stockpiles increased week-to-week to 20.346 million barrels on July 31.
That’s up from 20.272 million barrels the previous week and the highest level since the seven days that ended on July 10, according to the EIA.
In other ethanol news, the U.S. Department of Energy said some oil refiners should be granted partial relief from the biofuel mandate, Reuters reported, citing two people familiar with the matter.
The Energy Department has recommended to the Environmental Protection Agency, which has the ultimate say in whether the waivers will be granted, that “a number” of the 58 pending requests for waivers, which cover the years 2011 through 2018, be at least partially granted, the Reuters report said.
3. Central Nebraska and Parts of Kansas Likely to See Rain Into the Weekend
Parts of central Nebraska and central Kansas could get some rain starting today, which may continue into the weekend, according to the National Weather Service.
There’s a chance for precipitation starting this evening in the area that will last overnight before tapering off, but starting again Saturday night, the NWS said in a report early this morning. Thunderstorms are forecast for the region early next week as well.
It’s going to be extremely hot, however, as heat indexes are expected to reach 105 degrees Fahrenheit on Saturday afternoon, mostly east of Highway 281. The surrounding areas likely will see indexes around 100 degrees, the agency said.
Further south in southern Kansas and northern Oklahoma, storms that could turn severe are expected to roll through the area.
“A few storms will be possible this morning for areas generally along and west of Interstate 135,” the NWS said. “The stronger storms will be capable of small hail and 40 to 50 mile-an-hour winds.”
The storms likely will continue east of I-135, leaving southeastern Kansas as the most likely location for severe weather, the agency said.