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3 Big Things Today, January 19

Soybeans, Grains Higher Overnight; Ethanol Production, Stockpiles Rose Last Week

1. Soybeans Higher Overnight as Argentina Crop Woes Persist

Soybeans were higher overnight on speculation that Argentina’s crop is actually smaller than previously forecast.

“Rumors are out that the Argentina soybean crop is smaller than analysts expect,” said Cory Brantland, an analyst at Kluis Commodities, in a note to clients on Friday morning. “There are still some soybean acres not planted, and some speculation they will not get planted.”

The Argentine soybean crop has been snakebit this year as the weather for a while was too dry, then it seemed to be getting some moisture, but now the forecast looks dry again.

Southeastern Argentina is expected to be dry for at least the rest of January, Commodity Weather Group said. Scattered rainfall in central Buenos Aires reached only 10% of the country’s soybean and corn crops, which are now at risk for near-term stress, the forecaster said.

Soybean futures for March delivery rose 4¢ to $9.77 a bushel overnight on the Chicago Board of Trade. Soybean meal futures gained $2.10 to $330.50 a short ton. Soy oil added 0.03¢ to 32.26¢ a pound.

Corn futures rose 1½¢ to $3.53 a bushel overnight.

Wheat for March delivery gained 1¼¢ to $4.26½ a bushel overnight on the Chicago Board of Trade. Kansas City futures added 1½¢ to $4.31 a bushel.


2. Ethanol Output Rises to Highest in Three Weeks, Stocks at Seven-Month High

Ethanol production rose to the highest level in three weeks in the seven days that ended on January 12 after plunging the prior week.

Output of the biofuel in the U.S. rose to 1.061 million barrels a day, on average, last week, according to the Energy Information Administration. That’s the highest level of output since the week that ended on December 22.

Stockpiles, meanwhile, rose to the highest in more than seven months.

Inventories on January 12 were reported at 22.743 million barrels, up from 22.719 million a week earlier, the EIA said in a report. While the increase was only moderate, it’s the highest level for ethanol stockpiles since May 26.

Producers are hopeful that Brazil will eliminate or cut its 20% import tax on U.S. ethanol after the country’s agriculture minister said earlier this week that he has ordered a proposal on the cost of doing so.

Elimination of the tariff is likely dependent on the U.S. allowing imports of Brazilian beef, which was banned last year due to inspection issues.

In other news, weekly export sales will be released this morning, a day late due to the Martin Luther King Jr. holiday on Monday.

Sales of corn are pegged from 500,000 to 800,000 metric tons, soybean sales are seen at 800,000 to 1.4 million, and wheat sales are expected from 200,000 to 500,000 tons, according to Allendale.


3. Winter Storm Watch Issued as Wintry Mix Heads to Central Plains This Weekend

A winter storm watch has been issued for a large part of the central Plains as yet another storm moves through the region.

As much as 8 inches of snow is expected in a band stretching from southwestern Wyoming to north-central Wisconsin, according to the National Weather Service.

Windy conditions are also expected with the storm as sustained gusts of up to 35 mph are forecast, which will reduce visibility and likely impact travel.

“A winter storm is predicted to develop across the central Plains this weekend,” the NWS said in a report early Friday morning. “The track of the storm and resultant impacts are still somewhat uncertain. However, light to moderate snow is likely and heavy snowfall is possible. Preparations for significant snow and blowing snow should be undertaken.”

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