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3 Big Things Today, December 1

Soybeans, Grains Higher Overnight; Few Happy About EPA Biofuel Mandate

1. Soybeans, Corn Higher on Argentina Weather; Wheat Gains on Saudi Arabia Tender

Soybean and corn futures were higher overnight amid dry weather concerns in Argentina while wheat gained on potential demand from Saudi Arabia.

Dry weather is now forecast for parts of Argentina in the next six to 15 days, according to Commodity Weather Group. That could hurt production in the South American country. Still, the forecaster said, weather models are split on whether it’ll be overly dry.

Saudi Arabia said on Thursday it’s seeking almost 500,000 metric tons of milling wheat; a tender deadline is set for today.

Soybean futures for January delivery gained 2¼¢ to $9.88 a bushel overnight on the Chicago Board of Trade. Soymeal rose 60¢ to $327.10 a short ton, and soy oil added 0.12¢ to 33.97¢ a pound.

Corn futures for March delivery rose a penny to $3.56¾ a bushel in Chicago.

Chicago wheat for March delivery rose 1¾¢ to $4.34¾ a bushel overnight, and Kansas City futures gained 3¢ to $4.34½ a bushel.

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2. EPA’s 2018 Biofuel Requirements Draw Ire From Both Sides of Ethanol Issue

The Environmental Protection Agency finalized its biofuel requirements for next year, saying it will require 19.29 billion gallons of renewable productions into fuels, up from this year’s 19.28 billion.

The total will include 15 billion gallons of conventional biofuels including ethanol, unchanged from 2017. Advanced biofuel requirements will total 4.29 billion gallons, up from 4.28 billion this year, according to the EPA.

Biodiesel targets were unchanged at 2.1 billion gallons.

“Maintaining the renewable fuel standard at current levels ensures stability in the marketplace,” EPA Administrator Scott Pruitt said in a statement.

Still, it seems nobody’s happy about the numbers.

Senator Chuck Grassley, a Republican from Iowa, said the EPA obligations fall short of the full potential of biofuels and called the lack of increase to the biodiesel target disappointing.

“Increases in the volume requirements are justified and would be good public policy,” he said in a statement. “Congress intended for the Renewable Fuels Standard to drive growth in biofuels across all categories. Contrary to that goal, this final rule does little to encourage investment and growth in advanced biofuels.”

Rep. Bob Goodlatte, the Virginia Republican, said in a statement that he wanted to see the RFS Reform Act, a bill cosponsored by him and two of his colleagues in the House, that would cap the amount of ethanol that would be blended at 10% of production and requires the EPA to set output levels for cellulosic biofuels.

The 2018 volumes are “more of the same” and consumers, food producers, livestock farmers, and the environment are the losers because the EPA failed to curb the biofuel mandate, according to a statement from Goodlatte; Steve Womack, an Arkansas Republican; and Peter Welch, a Vermont Democrat.  

“The RFS has run out of gas, but that hasn’t stopped the EPA from once again acting to prop up the ethanol industry,” the statement said. “Reforming the RFS remains a major priority, and we will continue working to see a legislative solution move forward through Congress.”

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3. Storms, Colder Weather Expected in New Mexico Along Texas, Oklahoma Panhandles

A strong weather front will bring “significantly colder temperatures” to parts of the southern Plains starting Monday, according to the National Weather Service.

The warnings are for parts of central and eastern New Mexico, just along the borders with Texas and Oklahoma, NWS maps show. A few inches of snow may accumulate in the area and there’s potential for larger amounts that could impact travel.

In the panhandles, temperatures are expected to top out in the high-60s this weekend but dip into the low 30s at night, according to the agency.

In Iowa, gusty winds and extremely low humidity will boost the likelihood of wildfires this afternoon.

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