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3 Big Things Today, June 21

Soybeans, Grains Mixed Overnight; Ethanol Production Rises to Highest Since February.

1. Soybeans, Grains Mixed Overnight Amid Trade Uncertainty

Soybeans and grains were mixed overnight as investors wait to see whether the U.S. or China threaten more tariffs on the others’ goods.

The tit-for-tat “trade war” between the two biggest economies in the world has led to a decline in commodity and stock prices, though wheat took back some of its losses yesterday while corn and soybeans each rose by less than a penny.

The U.S. announced tariffs on $50 billion worth of Chinese goods last week and has threatened to impose duties on another $200 billion worth of wares from the Asian nation. China responded by saying it would impose levies on an equal amount of U.S. goods (which will likely include soybeans), and that it’s not afraid of a fight.

That caused bean futures to plunge to the lowest in almost a decade. The sell-off, however, sparked bargain buying as some end-users filled needs and speculative investors who’d bet on lower prices bought back their contracts and closed their positions.

Traders seem to be in limbo this morning as they await further announcements.

Soybean futures for July delivery fell 3¼¢ to $8.86¼ a bushel overnight on the Chicago Board of Trade. Soy meal rose 30¢ to $333.50 a short ton, and soy oil lost 0.19¢ to 29.18¢ a pound.

Corn futures rose ¼¢ to $3.54½ a bushel overnight.

Wheat for July delivery lost 1¾¢ to $4.97½ a bushel overnight, while Kansas City futures declined 4¢ to $5.01¾ a bushel.


2. Ethanol Production Rises to Highest Since February, Stockpiles Decline

Ethanol production rose to the highest level in almost four months, while stockpiles of the biofuel declined last week, according to the Energy Information Administration.

Output in the seven days that ended on June 15 totaled 1.064 million barrels, on average, per day, the EIA said in a report. That’s up from 1.053 million during the prior seven days and the highest since the week that ended on February 16.

Inventories of ethanol, meanwhile, declined to 21.467 million barrels last week, down from 22.174 million seven days earlier and the lowest level in four weeks, government data show.

The Trump administration looks to be throwing the ethanol industry a bone as the EPA is expected to announce a reallocation of blending obligations that were waived under its small refinery exemption program, Reuters reported, citing two people familiar with the plans.

Some refiners had been granted waivers exempting them from their blending responsibilities under the Renewable Fuels Standard, a move that angered not only the ethanol industry but also lawmakers including Iowa Senator Charles Grassley.

An announcement from the EPA is expected as early as Friday, Reuters reported.

In other news, the USDA is expected to release its Weekly Export Sales Report this morning.

Old-crop corn sales are pegged from 700,000 to 1 million metric tons and soybean sales are seen from 300,000 to 600,000 tons, according to Allendale. New-crop corn sales are expected from 150,000 to 400,000 tons and soybean sales are forecast from 100,000 to 400,000 tons.

Wheat sales for delivery in the marketing year that started on June 1 are pegged from 250,000 to 500,000 metric tons, the researcher said.


3. Flood Warnings, Flash Flood Watches Move East Into Illinois

Flood warnings and flash flood watches have moved east into eastern Iowa and the northern third of Illinois as excessive rain falls in the region.

Along with what’s already fallen, another round of showers is expected to develop and become more widespread in the area today, according to the National Weather Service.

“Rainfall rates of 1 to 2 inches per hour could produce flash flooding … near smaller rivers and streams,” the NWS said. “More prolonged high-water levels are also possible as the ground becomes saturated.”

Flood warnings are in effect in some areas, meaning flooding is already happening.

Additional thunderstorms are possible early next week, which will continue to saturate the area, the agency said.

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