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3 Big Things Today, January 21, 2022

Soybeans, Grains Lower Overnight; Ethanol Output Jumps to Three-Week High.

1. Soybean and Grain Futures Decline Overnight

Soybean and corn futures fell in overnight trading as rain in Argentina is expected to improve crop prospects.

Rain fell in parts of the South American country and will continue through the first half of next week, Commodity Weather Group said in a report.

Any heat will be limited to northern Argentina, the forecaster said.

An estimated 1 to 3 inches of rain – more in some areas – likely will eliminate any remaining moisture deficits in 40% of the country, CWG said.

Still, drought conditions continue in about 25% of Brazil and 70% of Paraguay, though showers are expected to expand next week.

Temperatures in southern Brazil and Paraguay are forecast to hit triple digits, which will add crop stress until the rains move in next week, Commodity Weather Group said.

Wheat futures were lower in overnight trading as some investors who were long the market, or bet on higher prices, sell contracts and book profits after prices hit the highest in three weeks.

Prices had been rising amid drought and cold weather in the U.S. Southern Plains, but some technical selling took place in the overnight session.

Tensions between Russia and Ukraine – two of the world’s largest exporters of the grain – also are underpinning wheat prices.

Soybean futures for March delivery fell 7½¢ to $14.18¼ a bushel overnight on the Chicago Board of Trade. Soymeal lost $4.30 to $396.50 a short ton and soybean oil futures added 0.25¢ to 63.13¢ a pound.

Corn futures for March delivery fell 3¢ to $6.08 a bushel.

Wheat for March delivery lost 6½¢ to $7.83¾ a bushel overnight, while Kansas City futures fell 4½¢ to $7.92 a bushel.

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2. Ethanol Production Surges to Three-Week High

Ethanol output jumped to a three-week high in the seven days that ended on Jan. 14 and stockpiles surged to the highest in 11 months, according to the Energy Information Administration.

 Production of the biofuel increased to an average of 1.053 million barrels a day from 1.006 million barrels the previous week, the EIA said in a report.

That’s the highest level since the week that ended on December 24.

In the Midwest, by far the biggest producing region, output averaged 994,000 barrels a day, up from 947,000 barrels a week earlier and also a three-week high.

West Coast production rose to an average of 9,000 barrels a day last week from 8,000 barrels, the agency said.

Gulf Coast output was unchanged week-to-week at 25,000 barrels a day, and East Coast production remained at an average of 11,000 barrels a day.

Rocky Mountain production fell to 14,000 barrels a day, on average, from 15,000 barrels the previous week, the government said.

Ethanol stockpiles, meanwhile, surged to 23.592 million barrels in the week through January 14.

That’s up from 22.911 million barrels a week earlier and the highest since the seven days that ended on February 12, the EIA said in its report.


3. Winter Weather Continues in Much of Central U.S.

Winter-weather advisories are in effect for much of the western Dakotas this morning as snow and ice are falling, according to the National Weather Service.

Snow accumulations are expected to total about an inch while ice will coat surfaces, the NWS said in a report early this morning.

“A light coating of ice will form on roads and bridges and make travel hazardous,” the agency said.

Wind-chill advisories are still in effect in much of Minnesota, western Wisconsin, and almost all of Iowa today.

Values are expected to fall as low as -35°F. in central Iowa this morning, the NWS said. Frostbite could occur in 10 minutes on exposed skin.

In north-central Oklahoma, meanwhile, a wind-chill advisory is in effect this morning as wind chills overnight dropped as low as -8°F., the NWS said.

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