3 Big Things Today, July 16, 2020

Soybeans, Corn Higher Overnight; Ethanol Production Nears Four-Month High.

1. Soybean and Corn Futures Higher in Overnight Trading

Soybeans and corn were higher in overnight trading on continued demand for U.S. agricultural products from China.

Exporters reported that China bought another 389,000 metric tons of soybeans and 132,000 tons of corn from the U.S. for delivery in the marketing year that starts on Sept. 1, the Department of Agriculture said yesterday.

On Tuesday, the agency reported that the Asian nation bought a single-day record 1.76 million metric tons of corn and 129,000 tons of soybeans.

The USDA last Friday reported that China had purchased 1.37 million metric tons of corn, some for delivery in the current marketing year and some for delivery after the start of September, along with 190,000 tons of U.S. spring wheat and 130,000 tons of hard-red winter wheat.

The improved demand is giving traders hope that China will live up to its obligations under the Phase One trade deal it signed with the U.S. in January.

Soybean futures for December delivery rose 3¾¢ to $8.86½ a bushel overnight on the Chicago Board of Trade. Soymeal added 40¢ to $293.80 a short ton, and soy oil gained 0.06¢ to 29.43¢ a pound.

Corn futures for December delivery were up 3¢ to $3.37 a bushel overnight.

Wheat futures for September delivery fell 3¼¢ to $5.47½ a bushel while Kansas City futures rose ¼¢ to $4.59 ¾ a bushel.

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2. Ethanol Output Climbs For 11th Straight Week While Inventories Decline

Ethanol production continues to climb, rising for the 11th straight week to the highest level in almost four months, according to the Energy Information Administration.

Output of the biofuel surged to an average of 931,000 barrels a day in the week that ended on July 10, the EIA said in a report.

That’s up from 914,000 barrels a day, on average, the previous week and the highest level since the seven days that ended on March 20. Production has risen every week since bottoming on April 24.

Gains were broad-based regionally.

In the Midwest, by far the biggest producing region, production rose to an average of 883,000 barrels a day from 876,000 barrels a week earlier. That’s also the highest amount since March 20.

Gulf Coast output surged to 17,000 barrels a day, on average, from 9,000 barrels a week earlier, the EIA said.

East Coast production rose to an average of 13,000 barrels a day from 12,000 barrels the previous week, Rocky Mountain output increased to 10,000 barrels from 9,000, and West Coast production was up to 9,000 barrels from 8,000 a day a week earlier, the agency said.

Stockpiles, meanwhile, declined week-to-week.

Inventories in the seven days through July 10 declined to 20.608 million barrels from 20.62 million the a week earlier, the EIA said in its report.

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3. Rain Expected in Minnesota, Nebraska as Heat Wave Continues in Southern Midwest

Rain showers are expected today in parts of central Minnesota that likely will last into the evening, according to the National Weather Service.

The isolated thunderstorms may turn severe with large hail and strong winds forecast, the NWS said in a report early this morning. The storms likely will continue into the weekend.

Precipitation also is expected in much of western and central Nebraska today. Some may turn severe with the main threats being damaging wind and large hail, the agency said.

Hot weather in the southern Midwest continues as heat indexes in eastern Oklahoma and almost all of Arkansas reach as high as 110°F.

Those working outside are advised to drink plenty of water and reschedule “strenuous activity” when possible, the NWS said.

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