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3 Big Things Today, December 20

Soybean Futures Higher Overnight; Ethanol Stockpiles Jump to Highest in Two Months.

1. Soybeans Rise Overnight on Continued Trade Optimism

Soybeans were higher in overnight trading as some investors were optimistic that China will continue to make purchases from U.S. supplies.

The USDA said yesterday that China purchased about 1.2 million metric tons of soybeans from the U.S. for delivery in the marketing year that ends on August 31.

That’s the second round of purchases China has made after buying about 1.5 million metric tons from U.S. inventories last week.

China agreed to purchase more agricultural products from the U.S. and curb its tariff rate on U.S. automobiles during a December 1 meeting between presidents Trump and Xi Jinping in Buenos Aires. The U.S., in return, agreed to keep its tariff rate on $200 billion worth of Chinese goods at 10% instead of raising them to 25%, as planned, on January 1.

Negotiators have until March 1 to work out a deal or the U.S. levy on Chinese goods will go higher, the White House has said.  

Soybean exports in the 2018-2019 marketing year that started on September 1 are pegged at 1.9 billion bushels, down from 2.129 billion a year earlier, the USDA said in a report last week.

Soybeans for January delivery rose 2¢ to $9.02 a bushel overnight on the Chicago Board of Trade. Soy meal gained $1.30 to $309.10 a short ton, and soy oil added 0.02¢ to 28.74¢ a pound. 

Corn futures for December delivery rose a penny to $3.82¾ a bushel.

Wheat for March delivery added 5¼¢ to $5.27¾ a bushel overnight, and Kansas City futures gained 5½¢ to $5.14 a bushel.


2. Ethanol Production Unchanged Week to Week, While Stockpiles Rise to Two-Month High

Ethanol production was unchanged week to week, while stockpiles of the biofuel jumped to their highest level in almost two months.

Output last week was unchanged at 1.046 million barrels a day, on average, the Energy Information Administration said in a report.

Midwestern production, which accounts for most U.S. output, was steady at an average of 963,000 barrels a day in the seven days that ended on December 14, the EIA said. A 1,000-barrel-per-day increase from East Coast producers offset a decline of 1,000 barrels in the Gulf Coast.

Production on the West Coast was steady at 20,000 barrels a day while Rocky Mountain facilities kicked out 14,000 barrels a day, on average, for the eighth straight week, according to the government.

Ethanol inventories in the U.S. totaled 23.873 million barrels last week, up from 22.89 million a week earlier and the largest amount since the seven days that ended on October 19, the EIA said.

In other news, the USDA will issue its Weekly Export Sales Report this morning.

Analysts are expected corn sales from 2.3 million to 2.9 million metric tons, soybean sales from 2.1 million to 2.7 million tons, and wheat sales from 500,000 to 700,000 tons, researcher Allendale said on Thursday morning.


3. Strong Winds, Dry Air Leads to Increased Fire Hazards in Central Kansas Thursday

Extremely strong winds are expected in much of central Kansas today, increasing chances of wildfires, according to the National Weather Service.

“Strong northwest winds will affect the region today with gusts up to 45 mph possible, especially across central and south-central Kansas,” the NWS said in a report early Thursday morning.

The winds and dry air combined will mean “very high grassland fire danger levels” for this afternoon, the agency said. Outdoor burning should be avoided.

Winter weather is expected in Kansas starting Saturday and lasting into Sunday, though any precipitation is expected to be light. A second, stronger storm is forecast to hit the area next week and could mean thunderstorms for much of the region, the agency said.

Farther north, parts of northern Minnesota are under a winter weather advisory as freezing drizzle is expected this morning.

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