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3 Big Things Today, July 23, 2020

Grains Lower, Beans Higher Overnight; Ethanol Output Falls First Time in Three Months.

1. Grains Lower, Soybeans Higher in Overnight Trading

Grain futures were lower in overnight trading on rainfall in parts of the Midwest while soybeans were higher on more demand news.

Rain is expected in parts of the eastern Nebraska and western Iowa today, though severe weather isn’t expected, the National Weather Service said. Warmer weather is forecast heading into the weekend, though more rain may fall Friday and Sunday, the agency said.

Showers are expected to linger in the next two days in parts of the Ohio Valley, and weekend rains are forecast for the northwestern Midwest, Commodity Weather Group said in a report.

Still, central Iowa is at risk of missing most of the rain forecast for the next couple of weeks, which could cause stress for maturing crops.

Soybeans were higher after the U.S. Department of Agriculture reported more sales to overseas buyers.

China made two purchases – 453,000 metric tons and 262,000 metric tons from U.S. supplies – and an unnamed country bought 211,300 tons of soybeans, the USDA said in a report yesterday.

On Tuesday, the agency reported sales of 126,000 tons of soybeans to China, 180,000 tons to unknown destinations, and corn sales totaling 207,880 tons to an unnamed buyer.

Corn futures for December delivery fell 1¢ to $3.34¼ a bushel overnight on the Chicago Board of Trade.

Wheat futures for September delivery lost ½¢ to $5.34 a bushel while Kansas City futures declined 1¼¢ to $4.47¼ a bushel.

Soybean futures for December delivery rose 2¼¢ to $8.97¾ a bushel overnight. Soymeal gained $1.20 to $295.40 a short ton and soy oil added 0.14¢ to 30.66¢ a pound.

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2. Ethanol Production Declines First Time in Almost Three Months

Ethanol production fell for the first time in almost three months last week while inventories plunged to the lowest since December 2016, according to the Energy Information Administration.

Output of the biofuel dropped to an average of 908,000 barrels a day in the week that ended on July 17, the EIA said in a report.

That’s down from 931,000 barrels a day, on average, and the first decline since the seven days that ended on April 24.

In the Midwest, by far the biggest producing region in the U.S., output fell to an average of 860,000 barrels a day from 883,000 barrels a week earlier, government data show. That’s also the first decline since late April.

Gulf Coast production fell to an average of 16,000 barrels a day from 17,000 barrels the previous week, the EIA said.

East Coast output was unchanged at 13,000 barrels a day, Rocky Mountain production was steady at 10,000 barrels a day, and West Coast output was unchanged at 9,000 barrels a day.

Stockpiles, meanwhile, fell to 19.801 million barrels in the seven days that ended on July 17, the agency said.

That’s down from 20.608 million barrels a week earlier and the lowest level since Dec. 30, 2016, EIA data show. The print also marks the first week stockpiles have fallen below the 20-million mark since the end of 2016.

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3. Heat Indexes Around 105°F. Expected in Parts of North Dakota and Minnesota

Excessive heat watches have been issued for several counties in North Dakota and Minnesota, according to the National Weather Service.

Heat indexes in eastern North Dakota and western Minnesota are expected to rise as high as 105°F. starting tomorrow, the NWS said in a report early this morning.

In south-central Minnesota, including the Twin Cities, heat values are expected to top 100°F..

“Extreme heat and humidity will significantly increase the potential for heat-related illnesses, particularly for those working or participating in outdoor activities,” the agency said.

Much of South Dakota will be under a heat advisory starting at 3 p.m. local time today through tomorrow evening as heat indexes are forecast to be around 105°F..

Farther south, storms are expected in much of Oklahoma and parts of Arkansas today that will bring heavy rainfall as they move slowly to the east. Strong winds also are likely, along with heat indexes of around 100°F., the NWS said.

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