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3 Big Things Today, July 14, 2022

Soybeans, Grains Lower Overnight; Ethanol Output Drops to Two-Month Low

1. Soybean, Grain Futures Down in Overnight Trading

Soybeans and grains all dropped in overnight trading on concerns about demand as the dollar strengthens and as talks to get Ukraine grains to global consumers continue.

Demand for U.S. products may wane as the dollar, which is at its strongest level in 24 years, continues to strengthen against peers as a strong greenback makes dollar-denominated commodities more expensive for global buyers.

The U.S. currency is now on par with the euro for the first time in 20 years, and has continued to strengthen against global currencies amid fiscal policy tightening and as investors flee to a haven investment amid economic uncertainty.

The value of the dollar was up another 0.7% overnight against a basket of global counterparts, according to Bloomberg data.

Prices also may be falling as a deal to get Ukraine grains exported may have finally been reached, though nothing has yet been finalized.

Russian forces continue to attack Ukraine, stranding wheat and corn in Black Sea ports.

Talks have been ongoing in a bid to help end a food crisis that's developed as the attacks on Ukraine continue. Few countries are buying Russian grain and, at least so far, Ukraine has been unable to ship much of its agricultural products due to the continued attacks.

Still, a meeting between Ukraine, Russia, Turkey and the United Nations that lasted three hours bore fruit, said UN Secretary General Antonio Guterres, who after the meeting called the talks "a ray of hope" but said they were "not yet fully done."

Soybean futures for November delivery dropped 13 1/4¢ to $13.36 ¼ a bushel overnight on the Chicago Board of Trade. Soymeal fell $2.70 to $399.80 a short ton, while soybean oil futures lost 1.12¢ to 55.59¢ a pound.

Corn futures for December delivery were down 4 3/4¢ to $5.90 ½ a bushel.

Wheat for September delivery lost 6 1/4¢ to $8.04 ½ a bushel while Kansas City futures declined 6 1/2¢ to $8.55 ¾ a bushel.

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2. Ethanol Production Falls to Almost Two-Month Low

Ethanol output last week dropped to the lowest level in almost two months while inventories increased, according to data from the U.S. Energy Information Administration.

Production of the biofuel in the week that ended on July 8 declined to an average of 1.005 million barrels a day, the EIA said in a report.

That's down from 1.044 million barrels per day, on average, and the lowest output level since the seven days that ended on May 13.

In the Midwest, by far the biggest producing region, output average 944,000 barrels per day, the agency said, down form 986,000 barrels a week earlier and also the lowest since mid-May, the agency said.

Gulf Coast production fell to 23,000 barrels a day from 24,000 barrels the previous week.

That was the entirety of the declines as West Coast output was unchanged at 9,000 barrels a day for the seventh straight week, the EIA said.

East Coast output increased to 13,000 barrels a day, up by 1,000 barrels from the previous week, and Rocky Mountain production rose to 15,000 barrels a day, on average, from 14,000 barrels.

Ethanol stockpiles, meanwhile, rose to 23.606 million barrels in the week through July 8, the government said.

That's up from 23.49 million barrels a week earlier and the highest level since the seven days that ended on June 3, the EIA said in its report.


3. Heat Advisories Issued From South Dakota Through Texas

Heat advisories have been issued in a narrow stretch of land from northern South Dakota all the way to south Texas, according to maps from the National Weather Service.

In parts of South Dakota and Nebraska, heat indexes today are forecast to reach as high as 101 degrees Fahrenheit, the NWS said in a report early this morning.

Values in parts of central Kansas likely will reach 106 degrees this afternoon, and in southern Oklahoma and northern Texas, heat indexes may top out at around 110 degrees, the agency said.

Those working outside are advised to take extra precautions to avoid heat-related illnesses, the NWS said.

Further east in parts of Iowa and northern Illinois, some precipitation is possible this afternoon along with brief bouts of lightning.

"Showers and scattered thunderstorms will develop late this evening through tonight," the agency said. "The main threats will be lightning and locally heavy rainfall."

Storms likely will continue through Friday, mostly north Interstate 80 in Iowa and Illinois with some turning severe. Damaging winds and heavy rainfall are expected, the NWS said.

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