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3 Big Things Today, December 30, 2021

Soybeans, Corn Lower in Overnight Trading; Ethanol Production Rises Slightly.

1. Soybeans and Corn Fall in Overnight Trading

Soybean and corn futures plunged in overnight trading on a mix of technical selling and as Brazil’s harvest begins.

Investors who were long the market, or bet on higher prices, likely liquidated contracts as the end of the year approaches.

In Brazil, the world’s largest exporter of soybeans, producers began the harvest this week, Reuters reported, an early start to what’s expected to be a record harvest.

Producers in the South American country are expected to produce 144 million metric tons of soybeans this year, up from 138 million a year earlier and the most on record, according to the U.S. Department of Agriculture.

Exports are pegged at 94 million metric tons, up from 81.7 million last year, the USDA said earlier this month.

That compares with U.S. production of 120.4 million metric tons and expected exports of 55.8 million tons, government data show.

Some rain is expected in parts of Brazil, which may improve soil moisture “a bit,” but west-central and southern areas will remain dry, Donald Keeney, an agricultural meteorologist with Maxar, said in a report.

In Argentina, however, rains will be sparse and temperatures will be high.

“Very limited rains and hot conditions in northern and eastern areas through the weekend will maintain notable stress on corn and soy,” Keeney said.

Soybean futures for November delivery dropped 12¼¢ to $13.56½ a bushel overnight on the Chicago Board of Trade. Soymeal fell $2.40 to $405.80 a short ton, while soy oil declined 0.57¢ to 56.34¢ a pound.

Corn futures for December delivery fell 3½¢ to $6.02 a bushel.

Wheat futures for December delivery rose 2¢ to $7.89¾ a bushel, while Kansas City futures gained 2¢ to $8.26½ a bushel.

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2. Ethanol Production Rises Narrowly Week-to-Week

Ethanol output rose slightly week-to-week while stockpiles declined, according to the Energy Information Administration.

Production of the biofuel increased to an average of 1.059 million barrels a day in the week that ended on Dec. 24, the EIA said in a report.

That’s up from 1.051 million barrels a day, on average, the previous week.

In the Midwest, by far the biggest producing region, output increased to an average of 1.001 million barrels a day, up from 991 million barrels a week earlier, the agency said.

That was the entirety of the gains.

East Coast production was again unchanged at 12,000 barrels a day and West Coast output remained at an average of 10,000 barrels, the EIA said.

Gulf Coast output declined to 23,000 barrels a day, on average, from 24,000 barrels the previous week.

Rocky Mountain production fell to an average of 13,000 barrels a day from 14,000 barrels, the government said.

Ethanol inventories in the week that ended on Dec. 24 fell to 20.676 million barrels, down from 20.705 million the previous week.

That’s the lowest level since the week that ended on Dec. 3, the EIA said in its report.

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3. Winter Storm Watches Issued From Kansas to Illinois

Winter storm watches have been issued for a wide stretch of the Midwest from western Kansas east into western Illinois into the weekend, according to National Weather Service maps.

In central Kansas, a mix of freezing rain, sleet, and snow is expected to start tomorrow, the NWS said in a report early this morning.

Snow accumulations will top out at more than 2 inches with ice buildup of .25 to .50 inch, the agency said. Wind gusts of 35 mph are forecast.

In eastern Iowa and western Illinois, meanwhile, up to 7 inches of snow is expected by Saturday evening. Snow will begin Saturday morning and last throughout the day, the NWS said.

Farther north in eastern North Dakota and western Minnesota, wind-chill warnings are in effect this morning.

Wind chills as low as -50°F. are expected in the area this morning, the agency said.

“The dangerously cold wind chills could cause frostbite on exposed skin in as little as 10 minutes,” the NWS said.

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