3 Big Things Today, February 25, 2021
1. Soybeans Reach Six-Year High on Brazil Rain Delays
Soybeans hit the highest prices in more than six years as continued rainfall in parts of Brazil slows the harvest.
Chinese soybean crushers may be forced to slow processing in coming months due to the delays in Brazil and amid dwindling availability of supplies, Reuters reported, citing market sources.
Soybean stockpiles in China, however, were pegged at almost 6 million metric tons as of Feb. 19, an increase of 8% year-over-year, agriculture consultant CCOBN said in a report.
Rainfall is expected to return to growing areas in center-west Brazil Friday through Tuesday, and more rain is in the 11- to 15-day forecast, according to Commodity Weather Group.
The precipitation will keep fieldwork delayed, the forecaster said.
Brazilian consultancy AgRural said the country’s soybean harvest was only 15% complete as of late last week, the slowest pace in a decade for mid-February.
Soybean futures for March delivery jumped 10¾¢ to $14.36½ a bushel overnight on the Chicago Board of Trade. Soymeal was up $1.20 to $428.50 a short ton, and soy oil added 0.49¢ to 50.52¢ a pound.
Corn for March delivery dropped 3½¢ to $5.53 ½ a bushel.
Wheat futures for March delivery fell 2¼¢ to $6.83¼ a bushel, while Kansas City futures lost 2½¢ to $6.60½ a bushel.**
2. Ethanol Production Drops to Lowest in More Than Nine Months
Ethanol output last week plunged to the lowest level in more than nine months and inventories hit a two-month low, according to the Energy Information Administration.
Production of the biofuel dropped to an average of 658,000 barrels a day in the week that ended on Feb. 19, the EIA said in a report.
That’s down from 911,000 barrels a day, on average, the previous week and the smallest output since the seven days that ended on May 8, the agency said.
The declines were geographically broad-based as every region saw declines.
In the Midwest, by far the biggest producing region, production dropped to an average of 631,000 barrels a day last week.
That’s down from 868,000 barrels a day the previous week and the lowest since May 15, government data show.
Gulf Coast production plunged to an average of 2,000 barrels a day in the week through Feb. 19. A large long-lasting winter storm hit the region leaving homes and businesses in Texas without power or water for several days.
East Coast output fell to an average of 11,000 barrels a day from 12,000 a week earlier, while Rocky Mountain production dropped to 5,000 barrels a day from 9,000 the previous week.
West Coast output was down to 8,000 barrels a day, on average, from 9,000 barrels, the agency said.
Stockpiles, meanwhile, dropped to 22.785 million barrels, down from 24.297 million the previous week and the lowest level since the seven days that ended on Dec. 4, the EIA said in its report.
3. Thunderstorms Expected in Parts of Texas, Oklahoma; Fire Risks Climb in South Dakota
Some thunderstorms are expected to roll across north Texas and southern Oklahoma late tonight, though the risk of severe weather is low, according to the National Weather Service.
Small hail is possible in the region as the thunderstorms roll through southern Oklahoma, the NWS said in a report early this morning.
The storms will continue through the week southeast of Stillwater, Oklahoma, to Wichita Falls, Texas.
In eastern Iowa and northern Illinois, up to .5 inch of snow is expected starting Friday evening, the agency said.
Farther north in southwestern South Dakota, a red-flag warning is in effect as low humidity and strong winds create tinderbox-like conditions.
Relative humidity is forecast to drop to 12% this afternoon with sustained winds of 25 mph and gusts up to 35 mph, the NWS said.
“Any fires that ignite will spread rapidly and become difficult to control or suppress,” the agency said.