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3 Big Things Today, December 23, 2021

Grains, Beans Mixed Overnight; Ethanol Production Drops to Three-Week Low.

1. Grains, Soybeans Mixed Ahead of Christmas

Grain and soybean futures were mixed in overnight trading as investors head to the exits ahead of the long holiday weekend.

Trading on the Chicago Board of Trade will be closed tomorrow for Christmas and reopen Sunday evening for overnight trading.

Investors are keeping an eye on dry conditions in the U.S. Southern Plains and weather in South America.

Little or no rain has fallen in much of the Southern Plains in the past 30 days, according to data from the National Weather Service.

About 20.1% of Kansas, the biggest producer of wheat in the U.S., was seeing drought conditions, up from 19.4% a week earlier and 6.38% three months earlier, according to the U.S. Drought Monitor.

The monitor is scheduled to be updated this morning.

In South America, meanwhile, some rain will aid crops in northern Brazil in the next 10 days, though drought stress will still affect 35% of corn and soybeans, Commodity Weather Group said in a report early this morning.

The 11- to 15-day outlook in central Brazil is calling for wetter weather, which is weighing on prices overnight.

Still, a hotter pattern is developing in parts of Argentina, Paraguay, and southwestern Brazil with temperatures expected to hit triple digits in the next six to 10 days, the forecaster said.

Demand has been quiet for the past week as the U.S. Department of Agriculture hasn’t reported a sale of 100,000 metric tons or more of corn, wheat, or soybeans since Dec. 17.

Wheat futures for March delivery fell 4½¢ to $8.09½ a bushel overnight on the Chicago Board of Trade, while Kansas City futures lost ¼¢ to $8.53½ a bushel.

Corn futures for March delivery were unchanged at $6.02½ a bushel.

Soybean futures for March delivery dropped 3¾¢ to $13.31¼ a bushel. Soymeal was down $1.30 to $397 a short ton, while soy oil fell 0.26¢ to 54.58¢ a pound.

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2. Ethanol Production Drops to Three-Week Low

Ethanol output in the seven days that ended on Dec. 17 fell to the lowest level in three weeks while stockpiles declined, according to the Energy Information Administration.

Production of the biofuel fell to an average of 1.051 million barrels a day, down from 1.087 million a week earlier, the EIA said in a report.

That’s the lowest level since the seven days that ended on Nov. 26.

In the Midwest, by far the biggest producing region, output fell to 991,000 barrels a day, on average, from 1.025 million barrels the previous week and the lowest in three weeks, the agency said.

Gulf Coast output fell to an average of 24,000 barrels a day from 26,000 barrels the previous week, and Rocky Mountain production dropped to 14,000 barrels a day from 15,000 barrels.

That was the entirety of the declines as East Coast production was again unchanged at 12,000 barrels a day.

West Coast output was the lone gainer for the week, rising to 10,000 barrels a day from 9,000 barrels the previous week, the government said.

Inventories were down narrowly, falling to 20.705 million barrels as of Dec. 17.

That’s down from 20.883 million barrels seven days earlier, the EIA said in its report.

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3. Strong Winds, Low Humidity Expected in Southern Plains

High-wind warnings and fire-weather watches have been issued for the Oklahoma and Texas panhandles, according to the National Weather Service.

Winds starting early tomorrow are forecast from 25 to 35 mph with gusts up to 65 mph expected, the NWS said in a report early this morning.

“Damaging winds will blow down trees and power lines,” the NWS said. “Widespread power outages are expected.”

Dust also will be a problem due to the winds as visibility will be reduced, creating dangerous travel conditions, the agency said.

The windy conditions along with low relative humidity will create tinderbox-like conditions.

Humidity will fall as low as 19% tomorrow, resulting in a red-flag threat index of a three out of four, the NWS said.

Farther north, parts of central Wisconsin may see a light wintry mix today that could create a glaze of ice overnight. Some snow is associated with a passing weather front, but it likely won’t be until Sunday, the NWS said.

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