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3 Big Things Today, February 10, 2022

Soybeans, Grains Higher Overnight; Ethanol Production Drops to Four-Month Low.

1. Soybean, Grain Futures Higher in Overnight Trading

Soybean futures were higher in overnight trading after the U.S. Department of Agriculture lowered its forecast for ending stockpiles in a report yesterday.

Inventories at the end of the 2021-2022 marketing year likely will total 325 million metric tons, the USDA said in its monthly World Agricultural Supply and Demand Estimates (WASDE) report.

That’s down from a previous outlook for 350 million metric tons.

The USDA also lowered its projection for output in Brazil, the world’s largest exporter of the oilseeds, to 134 million metric tons from the prior forecast for 139 million metric tons.

Argentinian production is now seen by the agency at 45 million metric tons, down from the December forecast for 46.5 million tons.

Dry weather in parts of South America has hurt crop prospects.

Wheat futures also were higher overnight after the U.S. Ag Department lowered its outlook for global ending stocks to 278.2 million metric tons from the prior month’s forecast for 280 million tons.

Production is now seen at 776.4 million metric tons from the previous projection of 778.6 million tons.

Soybean futures for March delivery jumped 19½¢ to $16.14¼ a bushel overnight on the Chicago Board of Trade. Soymeal was up $8.60 to $470.50 a short ton and soybean oil futures added 0.63¢ to 64.73¢ a pound.

Corn futures for March delivery gained 2¢ to $6.48¾ a bushel.  

Wheat for March delivery added 7¾¢ to $7.92¾ a bushel, while Kansas City futures rose 6¾¢ to $8.21¾ a bushel.

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2. Ethanol Production Drops to Four-Month Low

Ethanol output plunged to the lowest level in four months last week while inventories also declined, according to the Energy Information Administration.

Production of the biofuel dropped to an average of 994,000 barrels a day in the week that ended on February 4, the EIA said in a report.

That’s down from 1.041 million barrels a day the previous week and the lowest since the seven days that ended on Oct. 1.

In the Midwest, by far the biggest producing region, output fell to an average of 939,000 barrels a day from 981,000 barrels a week earlier, also the lowest since the beginning of October, the government said.

Gulf Coast output declined to 20,000 barrels a day, on average, from 25,000 barrels the previous week.

That was the entirety of the declines.

Production in the Rocky Mountain region was unchanged at 15,000 barrels a day, on average, and West Coast output was steady at 9,000 barrels a day, the agency said.

East Coast production, meanwhile, increased to an average of 12,000 barrels a day, up from 11,000 barrels the previous week and the highest level since December 31.

Ethanol inventories in the week through February 4 declined to 24.799 million barrels, government data show. That’s down from 25.854 million barrels the previous week, the EIA said in its report.

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3. Winter Weather Likely in Parts of North-Central U.S.

A winter-weather advisory has been issued from western North Dakota into northern Michigan, according to the National Weather Service.

From 4 to 9 inches of snow are expected in northern Minnesota starting late this afternoon, the NWS said in a report early this morning. Some locally higher totals are possible.

Winds are forecast as high as 35 mph.

Northern Wisconsin is expected to receive up to 4 inches of snow, which may turn into freezing drizzle overnight into Friday, the agency said.

“A fast-moving storm system will sweep across the region tonight,” the NWS said. “Snow from the storm will begin in central and north-central Wisconsin toward evening, then quickly spread east across the rest of the region. The snow could fall quite heavily for a couple hours during the evening then will diminish to light snow and drizzle or freezing drizzle after midnight.”

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