3 Big Things Today, January 6, 2022
1. Soybeans and Grains Lower in Overnight Trading
Soybean and grain futures were lower in overnight trading as some rain is forecast in Brazil that may boost crop prospects.
“Patchy showers” fell in the Brazilian states of Rio Grande do Sul and Parana this week while some southeastern growing areas also were forecast to receive precipitation, according to Commodity Weather Group.
The next two weeks likely will be wetter than it has been in southern Brazil and Paraguay, though the rain will probably be too late to improve crop conditions, the forecaster said.
Still, the outlook isn’t all positive as 20% of soybean area in Brazil and 35% of Paraguay’s growing regions remain stressed from drought, CWG said.
Half of corn and soybean production areas in Argentina picked up about a half inch of rain this week, but moisture deficits will still expand from 35% to 40% to as much as 75% next week, Commodity Weather Group said.
In the U.S., rain is expected in the eastern Midwest where soft-red winter wheat is overwintering, which may help soil moisture, though in the Southern Plains, where hard-red varieties are growing, dry weather is forecast for the next two weeks.
Little or no rain has fallen in much of southwestern Kansas and the Oklahoma and Texas panhandles in the past 30 days, according to the National Weather Service’s precipitation page.
Soybean futures for March delivery dropped 13¼¢ to $13.81½ a bushel overnight on the Chicago Board of Trade. Soymeal fell $4.80 to $408.60 a short ton and soy oil lost 0.31¢ to 59.13¢ a pound.
Corn futures for March delivery fell 1¼¢ to $6.01 a bushel.
Wheat futures for March delivery lost 5½¢ to $7.55¼ a bushel, while Kansas City futures plunged 8¼¢ to $7.78¾ a bushel.**
2. Ethanol Production Falls to Lowest in a Month
Ethanol output dropped the lowest level in more than a month while stockpiles jumped, according to the Energy Information Administration.
Production of the corn-based biofuel fell to an average of 1.048 million barrels a day in the week that ended on Dec. 31, the EIA said in a report.
That’s down from 1.059 million barrels a day, on average, the previous week and the lowest level since the seven days that ended on Nov. 26, the agency said.
Output in the Midwest, by far the biggest producing region, dropped to an average of 989,000 barrels a day, down from 1.001 million barrels the previous week.
Rocky Mountain production fell to 11,000 barrels a day, on average, from 13,000 barrels a week earlier. That’s the lowest level since Nov. 26, the government said.
West Coast output declined to 9,000 barrels, down from 10,000 barrels a week prior, the EIA said.
Production on the East Coast, meanwhile, rose to an average of 14,000 barrels a day. Output in the region had been stuck at 12,000 barrels a day since the first week of November.
Gulf Coast production also rose, jumping to an average of 26,000 barrels a day last week, the agency said. That’s up from 23,000 barrels a day a week earlier and the highest level since Nov. 26.
Ethanol stockpiles surged in the seven days that ended on Dec. 31.
Inventories rose to 21.359 million barrels, up from 20.676 million the previous week. That also marks the highest level since the week that ended on Aug. 13, the EIA said in its report.
3. Winter-Storm Warnings, Weather Advisories in Effect For Kentucky, Tennessee
Winter-storm warnings and winter weather advisories are in effect for much of Kentucky and Tennessee where up to 8 inches of snowfall is possible today, according to the National Weather Service.
Snow will fall at a rate of at least an inch an hour this afternoon and evening, the NWS said in a report early this morning.
Visibility in the area will fall to less than a mile at times.
A winter weather advisory remains in effect this morning in parts of Kansas and Missouri.
Along the border of the states, snow accumulations are expected to top out at about 3 inches, the agency said. Wind chills are forecast as low as -15°F.
“Patchy blowing snow could significantly reduce visibility,” the NWS said. “The cold wind chills could result in hypothermia if precautions are not taken.”