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3 Big Things Today, July 20

Corn, Soybeans Higher in Overnight Trading; Heat Wave Parked Over Central U.S. Expands.

1. Corn, Bean Futures Rise as Heat Wave Continues in Central Midwest

Corn and beans were higher in overnight trading as hot weather continues in much of the central Corn Belt. Wheat declined.

Temperatures are expected to reach triple digits, with heat indexes as high as 110˚F. today in the eastern half of Kansas, southeastern Nebraska, the southern half of Iowa, almost all of Missouri, and a large chunk of Illinois, according to the National Weather Service.

The heat wave, which is never really welcome, comes at a bad time as corn is silking and soybeans are blooming and setting pods.

Crop conditions declined this week with corn, beans, and wheat all dropping by 1 percentage point due to the extremely hot weather this summer.

Corn for December delivery rose 5¢ to $4.01¼ a bushel overnight on the Chicago Board of Trade.

Soybeans for November delivery gained 8¾¢ to $10.21¼ a bushel overnight. Soy meal gained $2.40 to $336.60 a short ton, and soy oil futures added 0.30¢ to 34.18¢ pound.

Wheat for September delivery fell 1¢ to $5.02 a bushel overnight, and Kansas City futures lost ½¢ to $4.99¾ a bushel.

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2. Ethanol Production Rises to Highest in Two Months; Report Shows Unexpected Crude Draw

Ethanol production in the U.S. rose to the highest level in two months, and inventories of the biofuel increased, according to the Energy Information Administration (EIA).

Output increased to 1.026 million barrels a day, on average, in the week that ended on July 14, the EIA said in a report. That’s up from 1.007 million a week earlier and the highest level since May 12.

Stockpiles, meanwhile, rose to 22.137 million barrels, up from 21.181 million a week earlier and the highest level since June 16, according to the EIA.

While ethanol production and carryout rose, the administration unexpectedly said stockpiles of crude oil dropped by 4.73 million barrels last week. Gasoline supplies plunged by 4.45 million barrels, the biggest decline since March, the EIA said.  

A report released on Tuesday from industry group American Petroleum Institute showed a build in crude inventories of 1.628 million barrels, making the EIA report quite a surprise.

Oil prices jumped after the government report, but West Texas Intermediate crude, the U.S. standard, is still well below $50, while Brent futures, the global benchmark, is just under that mark.

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3. Extremely Hot Weather Stands Fast, Continues to Bake Corn Belt

The heat dome parked over the central U.S. has shifted slightly south but actually expanded and doesn’t appear to be going anywhere for another few days.

Triple digits with heat indexes topping 110˚F. are expected through the end of the week, according to the National Weather Service.

Extreme heat advisories are in effect for the better part of Kansas, Missouri, Iowa, and parts of Nebraska and Illinois, the NWS maps show. Heat advisories are in effect in several other surrounding states.

In the Northern Plains, however, thunderstorms are possible in areas that need rain.

“A few strong to severe thunderstorms are possible across western North Dakota this afternoon and evening,” the NWS said.

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