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3 Big Things Today, July 12

Soybeans, Grains Rebound Overnight; Ethanol Production Declined Last Week, Stockpiles Higher.

1. Soybeans, Grains Rebound Ahead of WASDE as Bargain Hunters Flock

Soybeans and grains were higher amid bargain hunting after prices plunged yesterday.

Beans and wheat futures lost more than 20¢ and corn fell almost 8¢ on Wednesday, bringing investors and end-users looking for supplies.

Prices were also steady ahead of today’s World Agricultural Supply and Demand Estimates Report (due out at noon in Washington) and the Export Sales Report.

Analysts believe the USDA will raise its corn production forecast to 14.269 billion bushels on yield of 174.9 bushels an acre, according to Allendale. Soybean output is projected at 4.314 billion bushels on average yield of 48.6 bushels an acre. All wheat production is pegged at 1.858 billion bushels, the researcher said.  

Prices are still capped amid concerns about the escalating trade war between the U.S. and China. The Trump administration said it would impose tariffs on another $200 billion worth of Chinese goods, but the new duties wouldn’t go into effect until after a public comment period. China has threatened further retaliation, but didn’t say what that would be.

Soybean futures for November delivery rose 3½¢ to $8.51¾ a bushel overnight on the Chicago Board of Trade. Soy meal gained $1.60 to $329.30 a short ton, and soy oil fell 0.07¢ to 28.75¢ a pound.

Corn future for December delivery gained 2¼¢ to $3.55½ a bushel overnight.

Wheat for September delivery rose 3¾¢ to $4.75½ a bushel, while Kansas City futures added 2½¢ to $4.76½ a bushel.

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2. Ethanol Production Falls to Seven-Week Low; EPA to Scrap Planned Blending Bump

Ethanol production fell to the lowest level in seven weeks, while stockpiles jumped, according to the Energy Information Administration.

Output of the biofuel in the week that ended on July 6 averaged 1.033 million barrels a day, down considerably from 1.067 million barrels a week earlier and the lowest since the seven days that ended on May 18, EIA data show.

Inventories, meanwhile, jumped to 22.393 million barrels, up from 21.975 million a week earlier and the highest since May 30, according to the government.

Ethanol was back in the news amid a Reuters report saying the EPA has spiked a plan that would force refiners to blend more ethanol to compensate for volumes exempted under the hardship waiver program.

The program allows blenders to partly forego their requirements under the Renewable Fuels Standard. Ethanol producers and farm-state legislators including Iowa’s Charles Grassley and Joni Ernst have railed against the program that’s been expanded by the Trump administration, saying it’s been overused, hurting ethanol and corn growers while benefitting the oil industry.

The EPA responded by saying it would increase blending requirements for the refining industry to 11.76% from 10.88% to offset what was lost under the hardship program, Reuters reported. That program has apparently been scrapped after protests from refiners.

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3. Heat Wave Spreads Into Eastern Oklahoma, Central Arkansas

The heat wave in the Midwest is getting bigger by the day and now encompasses parts of eastern Oklahoma and much of north-central Arkansas.

The hot weather already covers much of eastern Nebraska and Kansas, almost all of Iowa, the western half of Missouri, and parts of Minnesota and Wisconsin, according to the National Weather Service.

In northern Missouri, heat indexes are expected to be as high as 107˚F. today and tomorrow, the NWS said in a report early Thursday morning. Overnight temperatures will only fall into the upper 70s, “providing little relief from the daytime heat,” the agency said.

In eastern Oklahoma, hot and humid conditions are expected today with heat indexes approaching 109˚F. The heat advisory for the area is in effect until 8 p.m. tonight.

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