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3 Big Things Today, January 5

Soybeans Higher in Overnight Trading; Weekly Ethanol Production Declines.

1. Soybeans Higher Overnight as Little Rain Expected in Argentina

Soybeans were higher in overnight trading as the weather in Argentina is expected to remain dry until at least next week.

Weather forecasters are predicting some precipitation in the six- to 15-day forecast, but none in the next few days. The highest risk for dry areas to linger are in the southern quarter of the country’s corn- and soy-growing areas, Commodity Weather Group said in a report.

Temperatures are in the low to mid-90s in Argentina, and the hot weather is expected to return next week, though the heat is expected to east in a couple of weeks, the forecaster said.

Wheat was little changed and leaning to the downside as the weather in the southern Midwest and Southern Plains warms up, curbing the risk of further winterkill.

Soybeans for March delivery rose 6¾¢ to $9.74½ a bushel overnight on the Chicago Board of Trade. Soy meal added $3.20 to $323 a short ton, and soy oil gained 0.05¢ to 33.92¢ a pound.

Wheat for March delivery fell 1¼¢ to $4.32¾ a bushel. Kansas City futures declined ½¢ to $4.39¼ a bushel.

Corn futures gained a penny to $3.52 a bushel overnight.


2. Ethanol Output Falls Christmas Week After Being at Lofty Levels Most of December

Ethanol production plunged to the lowest level since October after spending most of December at or near record highs.

Companies produced an average of 1.032 million barrels a day of the biofuel in the seven days that ended on December 29, down from 1.09 million barrels the prior week, the Energy Information Administration said in a report.

The decline likely can be attributed to reductions during the Christmas holiday week. Still, production in Iowa, the biggest ethanol-maker in the U.S., rose to a record in 2017, according to the state’s Renewable Fuels Association.

Output in the week that ended on December 1 reached a record 1.108 million barrels a day, on average, and production levels stayed near that level for the ensuing three weeks.

The increased ethanol output led the USDA to raise its forecast for how much corn would be used to make the biofuel in the marketing year that ends on August 31 by 50 million bushels.

Ethanol stockpiles also rose last week.

Inventories jumped to 22.619 million barrels, up from 22.031 million a week earlier, the first weekly increase since the seven days that ended on December 1, according to the EIA.

In other news, the USDA will release its weekly Export Sales Report this morning, a day late due to the New Year’s holiday.

Analysts expect corn sales from 600,000 to 1 million metric tons, soybean sales from 600,000 to a million tons, and wheat sales from 225,000 to 500,000 tons, according to Allendale.


3. Storm Continues to Slam East Coast Friday, Still Bitterly Cold in Northern Midwest

The powerful low-pressure system that’s blasting the East Coast will continue to bring heavy snow, strong winds, and dangerous travel conditions to the area, according to the National Weather Service.

The storm is expected to exit the region late Friday and conditions will “gradually” improve, the NWS said in a report early Friday morning.

“Very cold temperatures and wind chills will follow for much of the eastern third of the country through the weekend,” the agency said.

In the Midwest, it’s still extremely cold, with temperatures in parts of Iowa, Minnesota, and Wisconsin ranging from -10˚F. to -20˚F. Some spots in central Wisconsin may hit -30˚F.

Wind chill advisories are in effect that could push temperatures even lower. With winds at 5 to 10 mph, wind chills will be as low as -25˚F. in parts of Iowa and Illinois, the NWS said.

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