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3 Big Things Today, July 8, 2022

Wheat Futures Higher Overnight; Ethanol Output Falls to One-Month Low

1. Wheat Futures Surge in Overnight Trading

Wheat futures jumped in overnight trading as investors pile back into the market after prices earlier this week hit the lowest in more than four months.

Investors are moving back into wheat after a brief respite amid ongoing concerns about global supplies and as the U.S. winter harvest continues.

Ukrainian producers are expected to harvest 21.8 million metric tons of wheat this year, down by almost a third year-over-year, French consultancy Agritel said earlier this week. Harvested area is forecast to fall 13%.

Dry weather in Australia will continues in some areas including south Queensland, New South Wales and South Australia, said Don Keeney, an agricultural meteorologist with Maxar.

In the U.S., 54% of the winter-wheat crop was harvested at the start of this week, up from 41% seven days earlier and ahead of the prior five-year average of 48%, according to the Department of Agriculture.

In Kansas, the biggest producer of winter varieties, 83% of the crop was in the bin as of Sunday, up from 59% a week earlier and the normal 65% for this time of year, the USDA said.

Corn futures also rose overnight as hot weather spreads in much of the southern Corn Belt.

Heat indexes from Oklahoma through parts of eastern Missouri will reach into the triple digits today, according to data from the National Weather Service.

In eastern Nebraska and central Iowa, heat indexes this weekend may hit 105 to 110 degrees Fahrenheit, the NWS said, though some non-severe thunderstorms may roll through southwestern Iowa.

Wheat for September delivery rose 20 1/4¢ to $8.56 ¾ a bushel overnight on the Chicago Board of Trade while Kansas City futures added 14 3/4¢ to $9.04 a bushel.

Corn futures for December delivery were up 7 1/2¢ to $6.03 ¾ a bushel.

Soybean futures for November delivery gained 3/4¢ to $13.66 ¼ a bushel. Soymeal fell $1.50 to $390.30 a short ton, while soybean oil futures added 0.45¢ to 60.04¢ a pound.

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2. Ethanol Production Falls to Lowest Level in a Month

Ethanol output dropped the lowest level in about a month while inventories increased, according to the Energy Information Administration.

Production of the biofuel fell to an average of 1.044 million barrels a day in the week that ended on July 1, the EIA said in a report.

That's down from the prior week's average of 1.051 million barrels a day and the lowest output level since June 3.

In the Midwest, by far the biggest producing region, production fell to 986,000 barrels a day, on average, from 990,000 barrels a week earlier, the government said. That's also the lowest since the beginning of June.

Rocky Mountain output declined to an average of 14,000 barrels per day from 15,000 barrels a week earlier.

East Coast production also fell, dropping to 12,000 barrels a day from 13,000 barrels, the EIA said.

Gulf Coast output was unchanged at 24,000 barrels per day, on average, and West Coast production remained at 9,000 barrels a day for the sixth consecutive week, the agency said.

Ethanol inventories, meanwhile, rose to 23.49 million barrels a day in the week through July 1.

That's up from 22.746 million barrels a day the previous week and the highest level since the seven days that ended on June 3, the EIA said in its report.

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3. Hot Weather Continues From Texas Into Southern Illinois

Heat warnings and advisories have been issued for several states stretching from central Texas into southern Illinois and east into the Carolinas heading into the weekend, according to the National Weather Service.

In eastern Oklahoma and Kansas, heat indexes are forecast to reach as high as 112 degrees Fahrenheit today, the NWS said in a report early this morning.

"Take extra precautions if you work or spend time outside," the agency said. "When possible reschedule strenuous activities to early morning or evening. Know the signs and symptoms of heat exhaustion and heat stroke."

In eastern Missouri and southern Illinois, index values are projected to reach as high as 108 degrees, the NWS said.

In central Illinois, meanwhile, a small grouping of thunderstorms is rolling through the area this morning, heading east into northern Indiana at about 30 miles per hour, weather maps show.

"Frequent cloud-to-ground lightning and locally heavy rain are possible," the NWS said. "Flash flooding is possible, isolated damaging wind gusts and small hail could occur with the strongest storms."

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