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3 Big Things Today, July 26

Soybean Futures Jump Overnight; Ethanol Production Surges to Highest This Year.

1. Soybeans Surge Overnight on Trade Deal With EU

Soybean futures jumped overnight after President Trump and European Commission President Jean-Claude Juncker said the European Union would buy more U.S. soybeans.

“This was a very big day for free and fair trade,” Trump said.

The announcement likely calmed fears that the U.S. would be unable to unload much of what’s expected to be a record crop.

The USDA earlier this month cut its export outlook for the 2018-2019 marketing year that starts on September 1 by 250 million bushels while simultaneously raising its projection on inventories to the highest ever.

A deal with the EU likely will also reduce worries about the escalating trade war with China, the world’s biggest buyer of soybeans. The U.S. imposed tariffs on $34 billion worth of Chinese goods, a move to which Beijing responded by putting duties and an equal amount of U.S. goods.

The U.S. has threatened to add another $200 million in Chinese wares to the tariff list, while China has been devaluing its currency.

Soybean futures for November delivery jumped 18½¢ to $8.94¼ a bushel overnight on the Chicago Board of Trade. Soy meal added $7.40 to $335.90 a short ton, and soy oil rose 0.24¢ to 29.06¢ a pound.

Corn futures for December delivery rose 6¢ to $3.79¼ a bushel overnight.

Wheat for September delivery rose 7½¢ to $5.50¼ a bushel in Chicago, while Kansas City futures added 8¼¢ to $5.49 a bushel.

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2. Ethanol Production Jumps to Highest Level in Seven Months, Sorghum Given Pathway

Ethanol production jumped to the highest level in seven months last week while inventories declined.

Output of the biofuel made from corn in the U.S. averaged 1.074 million barrels a day in the seven days that ended on July 20, according to the Energy Information Administration. That’s up from 1.064 million a week earlier and the highest output since December 22.

Stockpiles of ethanol, meanwhile, declined for a second straight week to the lowest in more than a month, the EIA said in a report.

Inventories totaled 21.653 million barrels as of July 20, down from the prior week’s 21.768 million and the lowest since the seven days that ended on June 15, the EIA said.

The EPA, meanwhile, this week issued a final notice approving a pathway for renewable fuel derived from sorghum. Acting Administrator Andrew Wheeler signed the notice along with Senator Jerry Moran of Kansas, Senator Deb Fischer of Nebraska, Representative Roger Marshall from Kansas, and the National Sorghum Producers and American Farm Bureau Federation.

“Today’s approval sets the stage for more homegrown fuels under the Renewable Fuel Standard and adds diversity to our mix of biofuels in the U.S.,” Wheeler said.

Moran and Marshall said low commodity prices are hurting farmers, and approving the pathway gives producers another outlet for their crops and will help the rural economy.

Don Bloss, the chair of the National Sorghum Producers, said it was a “great day” for sorghum farmers and those in the ethanol and biodiesel industries.

“A pathway for sorghum oil opens new markets for ethanol plants extracting oil from sorghum and, ultimately, adds value to the grain farmers’ produce,” he said.

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3. Thunderstorms Again Possible in Parts of Eastern Nebraska, Western Iowa

Thunderstorms are again possible today in parts of eastern Nebraska, western Iowa, and northeastern Kansas, according to the National Weather Service.

Storm chances are expected to continue Friday through Saturday night, and more flooding in extreme southeastern Nebraska is expected along the Missouri River, the NWS said in a report early Thursday morning.

Farther east in northern Indiana and southern Michigan, there’s a chance of thunderstorms developing this weekend, but otherwise no further severe weather is forecast.

 

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