3 Big Things Today, January 14, 2021

Corn Futures Slightly Lower Overnight; Weekly Ethanol Production Higher.

1. Corn Futures Modestly Lower in Overnight Trading

Corn futures were slightly lower in overnight trading as investors take a step back after prices hit the highest in more than seven years yesterday.

Soybeans were modestly higher while wheat was mixed overnight.

Investors who were long the market, or bet on rising prices, may be slowing purchases or selling contracts and liquidating positions after corn futures yesterday hit the highest since 2013.

The buying was spurred by concerns about South American crops and after the U.S. Department of Agriculture cut its projections on output, yield, and ending stocks in its monthly World Agricultural Supply and Demand Estimates (WASDE) report this week.

Corn production in the 2020-2021 marketing year is pegged at 14.182 billion bushels on yield of 172 bushels an acre, and stockpiles are seen at 1.552 billion bushels, the USDA said on Tuesday.

The estimates, however, are down month-to-month from prior estimates for 14.507 billion bushels, 175.8 bushels an acre, and 1.702 billion bushels, respectively.

While prices were slightly lower overnight, the bullish fundamentals haven’t changed, which should underpin prices.

Soybeans were modestly higher overnight after the USDA also dropped its forecasts for production, yield, and stockpiles.

Output is seen at 4.135 billion bushels on yield of 50.2 bushels an acre. Those projections are down from 4.17 billion bushels and 50.7 bushels an acre the previous month, respectively.

READ MORE: Thursday's grain markets trade mixed

Inventories are now forecast at 140 million bushels, down from the December outlook for 175 million bushels, the USDA said.

Corn futures for March delivery fell 1¢ to $5.23½ a bushel overnight on the Chicago Board of Trade.

Soybean futures for January delivery rose 2¾¢ to $14.09 a bushel overnight. Soymeal gained $4.40 to $461.50 a short ton, and soy oil dropped 0.81¢ to 41.37¢ a pound.

Wheat futures for March delivery were down 2¾¢ to $6.57¾ a bushel, while Kansas City futures fell ½¢ to $6.25¼ a bushel.

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2. Ethanol Production Rises While Stockpiles Hit Eight-Month High

Ethanol output in the U.S. increased to the highest level in three weeks while stockpiles surged to the highest level in eight months, according to the Energy Information Administration.

Production of the biofuel rose to an average of 941,000 barrels a day in the week that ended on Jan. 8, the EIA said in a report.

Last week’s total was up from 889,000 barrels a day in the previous seven-day period and the highest since the week that ended on Dec. 18.

In the Midwest, by far the biggest producing region, output rose to 895,000 barrels a day, on average, the agency said.

That’s up from an average of 895,000 barrels a day the previous week and also the highest level in three weeks.

Production on the West Coast rose to an average of 10,000 barrels a day from 9,000 barrels the previous week, the government said.

East Coast output was unchanged at 12,000 barrels a day, and Rocky Mountain production was unchanged at 9,000 barrels a day.

Gulf Coast production declined to 15,000 barrels a day, on average, from 16,000 barrels a week earlier, the agency said.

Stockpiles, meanwhile, jumped to 23.692 million barrels in the seven days that ended on Jan. 8, up from 23.284 million a week earlier.

That’s the highest amount of ethanol in storage since the week that ended on May 8, the EIA said in its report.

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3. Blizzard Warnings in Effect From Central Minnesota to Northwest Missouri

Blizzard and winter storm warnings have been issued for a large chunk of the Midwest Thursday as snow and strong winds are in the forecast.

A blizzard warning in northeastern South Dakota and central Minnesota south through western Iowa into northwestern Missouri will begin at 6 p.m. and last through tomorrow evening, according to the National Weather Service.

As much as 9 inches of snow and winds gusting up to 50 mph are expected.

“Travel could be very difficult if not impossible at times with blowing snow significantly reducing visibility” in west-central Iowa, the NWS said in a report early this morning. “The hazardous conditions will impact the Thursday evening, Friday morning, and Friday evening commutes. Isolated power outages and tree damage may occur with the gusty winds.”

In central Minnesota, 7 to 9 inches of snow are forecast along with winds expected to gust from 40 to 50 mph.

In eastern Minnesota, a winter storm warning will begin at noon today and last through Friday evening, the NWS said.

“A wintry mix of snow, sleet, and rain moves in this morning, transitioning to snow for most locations by the afternoon,” the agency said. “The heaviest snows and bulk of the accumulations are expected tonight. There may be a lull in the snowfall overnight, mostly across parts of southwest Wisconsin.”

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