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3 Big Things Today, February 3, 2022

Soybeans, Grains Lower in Overnight Trading; Ethanol Output Rises Slightly.

1. Soybean, Grain Futures Drop in Overnight Trading

Soybean and grain futures pulled back in overnight trading on some technical selling and reduced worries about the conflict between Russia and Ukraine.

Prices have been relatively high in recent weeks due to dry weather in South America and concerns about Russia’s amassing more than 100,000 troops along its border with Ukraine.

Investors are eyeing planting decisions that could be influenced by relatively high prices for this time of the year. Still, high prices for inputs including fertilizer may keep some seeds out of the ground.

Speculators and hedgers also are looking at current demand, which likely will be affected by the beginning of the Chinese New Year.

Wheat futures were lower on diminishing worries about the potential conflict between Russia and Ukraine. The sides continue to talk, and the U.S. backed off its assertion that an attack by Russia is imminent.

Washington has said it will send another 3,000 troops to Poland and Germany and another 1,000 will move to Romania.

Despite the buildup, concerns about a drawn-out conflict have eased as government officials try to work out a peaceful solution.

Soybean futures for March delivery dropped 10¾¢ to $15.34½ a bushel overnight on the Chicago Board of Trade. Soymeal was down 50¢ to $434.60 a short ton and soybean oil futures lost 0.77¢ to 65.21¢ a pound.

Corn futures for March delivery fell 6¢ to $6.16½ a bushel.  

Wheat for March delivery lost 5½¢ to $7.49¼ a bushel, while Kansas City futures dropped 5¢ to $7.64½ a bushel.

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2. Ethanol Production Up While Inventories Highest in 21 Months

Ethanol output rose slightly while stockpiles surged to the highest level in almost two years, according to the Energy Information Administration.

Production of the biofuel increased to an average of 1.041 million barrels a day in the week that ended on January 28, the EIA said in a report.

That’s up from 1.035 million barrels a week earlier.

In the Midwest, by far the biggest producing region, output averaged 981,000 barrels a day, up from 979,000 barrels the previous week, the agency said.

Gulf Coast production rose to an average of 25,000 barrels a day from 21,000 barrels a week earlier, and East Coast output improved to 11,000 barrels a day from 10,000 barrels.

Rocky Mountain production was unchanged at 15,000 barrels a day, on average, and West Coast output was steady at 9,000 barrels a day, government data show.

Inventories, meanwhile, surged to 25.854 million barrels in the seven days that ended on January 28.

That’s up from 24.476 million barrels a week earlier and the highest level since April 24, 2020, the EIA said in its report.

In other ethanol news, Iowa’s House passed a bill that would require retailers to sell gasoline with 15% ethanol rather than 10%, which is what’s currently common at gas pumps.

The bipartisan bill was passed with an 82-10 vote – only seven Republicans and three Democrats voted against – to the state senate.


3. Winter Storms and Extreme Cold Chilling U.S. Midwest

Winter-weather advisories have moved south and east and now stretch from eastern New Mexico all the way to the Maine coast, according to National Weather Service maps.

Wind-chill warnings have replaced storm warnings in the central Corn Belt.

Heavy snow is expected today in parts of southern Missouri and southern Illinois today with another 3 to 5 inches of snow expected to fall on top of what’s already on the ground, the NWS said in a report early this morning.

Almost all of Ohio is under a winter-storm warning as another round of snow is expected to fall at a rate of about 0.5 inch per hour, the agency said.

“Strong north to northeast winds will allow for blowing and drifting of snow, which could especially impact east-west oriented roadways,” the NWS said. “Low temperatures tonight will reach the single digits and wind-chill values as low as -5°F. are expected.”

Wind-chill advisories have been issued for parts of several states including Nebraska, Iowa, and Kansas.

In central Iowa, values overnight were expected to fall as low as -25°F., the agency said.

A wind-chill warning has been issued for much of North Dakota where values overnight were forecast to fall as low as -50°F. Exposure to such cold wind could cause frostbite in as little as five minutes, the NWS said.

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