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3 Big Things Today, January 28, 2021

Corn, Soybeans Higher Overnight; Ethanol Production Drops to Three-Month Low.

1. Corn and Soybean Futures Rise in Overnight Trading

Corn futures jumped and soybeans were higher in overnight trading on continued signs of strong demand for U.S. supplies.

Exporters reported sales of 680,000 metric tons of corn and 132,000 tons of soybeans to China and 126,500 metric tons of soybeans to an unnamed country, the U.S. Department of Agriculture said yesterday.

That follows sales of 1.36 million metric tons of soybeans to China and 102,800 metric tons of corn to an unknown destination reported on Tuesday.

Chinese demand for soybeans and corn have been robust and domestic use is forecast to increase for both commodities this year, according to data from the USDA.

Since the start of the marketing year on September 1, exporters have sold 57.4 million metric tons of soybeans to overseas buyers, an 84% increase from the same time frame a year earlier, according to the government.

Corn sales since the beginning of September are now at 46.8 million metric tons, a 131% increase year-over-year. Wheat sales since the start of the grain’s marketing year are at 21.6 million metric tons, a 6% increase from the same period the previous year, the USDA said.

The USDA will release its weekly export sales report this morning.

Corn for March delivery rose 4¼¢ to $5.38¼ a bushel overnight on the Chicago Board of Trade.

Soybean futures for March delivery gained 2¾¢ to $13.77½ a bushel. Soymeal rose $1.40 to $438 a short ton, and soy oil added 0.25¢ to 44.77¢ a pound.

Wheat was lower overnight on some long liquidation as fund managers who had been bullish sell their contracts and close their positions.  

Wheat futures for March delivery dropped 6¼¢ to $6.52 a bushel, while Kansas City futures lost 4¾¢ to $6.32 a bushel.

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2. Ethanol Production Falls to Lowest in More Than Three Months

Ethanol output last week fell to the lowest level in more than three months while inventories of the biofuel also declined, according to the Energy Information Administration.

Production fell to an average of 933,000 barrels a day in the week that ended on January 22, the EIA said in a report.

That’s down from 945,000 barrels a day, on average, the previous week and the lowest level since the seven days that ended on October 16, the agency said.

In the Midwest, by far the biggest producing region, production dropped to an average of 889,000 barrels a day, down from 902,000 barrels a week earlier and the lowest output since the week that ended on January 1.

East Coast production fell to an average of 11,000 barrels a day from 12,000 barrels a week earlier.

That was the entirety of the declines as both Rocky Mountain and West Coast output were unchanged at 9,000 barrels a day, on average.

Output in the Gulf Coast region rose to an average of 15,000 barrels a day last week, up from 12,000 barrels in the prior seven-day period, the government said.

Stockpiles, meanwhile, declined to 23.602 million barrels in the week through Jan. 22.

That’s down from 23.628 million barrels in the previous week and the lowest level since the seven days that ended on January 1, the EIA said in its report.


3. Rainfall Likely in Parts of Midwest While Storm Takes Aim at Eastern Iowa

Rain is possible heading into the weekend for parts of the Midwest after a winter storm dumped several inches of snow in the area earlier this week, according to the National Weather Service.

Precipitation is expected in parts of Nebraska – where snowfall on Tuesday was the seventh-highest on record – and northern Missouri throughout the weekend, the NWS said in a report.

As much as 1.25 inches of rain are possible Saturday in northwestern Missouri, the agency said.

Farther east in parts of eastern Iowa and northern Illinois, more snow is on the way after a very cold lead-up into the weekend.

Wind chills this morning are expected to fall as low as -15°F., leading into a winter storm this weekend, the NWS said.

“A winter storm system will bring a wintry mix of rain and snow, and gusty winds to the area this weekend,” the agency said. “Accumulating snow appears likely for portions of the Outlook area. However, it is too early to determine amounts. Those with travel plans should monitor later forecasts.”

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