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3 Big Things Today, January 25

Soybeans, Grains Higher Overnight; Ethanol Stockpiles Rise to Record, Production Higher

1. Soybeans, Grains Higher Overnight as Dollar Drops to Three-Year Low

Soybeans and grains were higher overnight as the value of the dollar hit the lowest level in more than three years, prompting traders to expect increased exports.

The greenback dropped to the lowest since December 2014 in the overnight session after Treasury Secretary Steven Mnuchin told reporters in Davos that the dollar’s value isn’t a concern of the administration and that a weaker currency will help trade.

Overseas buyers have more purchasing power and tend to buy more from the U.S. when the dollar is weak.

Soybean futures for March delivery rose 2¼¢ to $9.94½ a bushel overnight on the Chicago Board of Trade. Soybean meal futures gained 40¢ to $342.40 a short ton, while soy oil added 0.03¢to 32.71¢ a pound.

Corn futures gained ¼¢ to $3.56¾ a bushel overnight.

Wheat for March delivery rose 2¢ to $4.35 a bushel overnight in Chicago. Kansas City futures also added 2¢ to $4.35 a bushel.

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2. Ethanol Stockpiles Jump to Record, Production at Highest Level in a Month

Ethanol stockpiles jumped to a record last week, while production reached the highest level in a month.

U.S. inventories of the biofuel surged to a record 23.8 million barrels in the week that ended on January 19, the Energy Information Administration said in a report.

The total was up from the prior week’s 22.743 million barrels and the prior year’s 21.728 million.

Inventories have been steadily rising, which tends to happen in January, along with output.

Production rose to 1.062 million barrels last week, up from 1.061 million a week earlier and the highest since the seven days that ended on December 22, according to the EIA. Output so far this year is up more than 3% over the same time frame a year earlier.

The increase was led by growth in Gulf Coast production, which was enough to offset declines in Midwest output.

In other news, the weekly Export Sales Report that normally would come out today has been delayed until tomorrow due to the government shutdown earlier this week.

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3. Extremely Dry Conditions Put Southern Plains at Risk of Wildfires

It’s going to be dry, windy and warm in much of the Southern Plains today, which means fire hazards all around.

The entire southern three fourths of Kansas, almost all of Oklahoma, and more than a dozen counties in the Texas Panhandle will be under a red-flag warning, meaning weather conditions are conducive to wild fires, according to the National Weather Service.

Relative humidity is forecast as low as 10% in parts of the region with wind gusts up to 45 mph, making for tinderbox-like conditions.

“Any fires that start will have extreme fire behavior and spread rapidly,” the NWS said in a report early Thursday morning. “Outdoor burning is not advised.”

Farther north, localized flooding is possible in parts of north-central Illinois, northeastern Illinois, and northwestern Indiana, especially near ice jams that have formed. Winds in the region are also expected to be strong with gusts of up to 35 mph, according to the NWS.

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