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3 Big Things Today, June 25, 2020

Soybeans Slightly Lower Overnight; Ethanol Production Nears Three-Month High.

1. Soybean Futures Modestly Lower in Overnight Trading

Soybeans were slightly lower in overnight trading Thursday as investors focus on rainfall in the U.S. Midwest that’s giving crops a boost.

Rain is expected from Kansas through northern Indiana today, the latest in several rounds of storms that have moved through the Corn Belt in recent days.

More precipitation is expected in much of the Midwest into the weekend, according to the National Weather Service, which likely will help freshly planted crops.

About 70% of the U.S. soybean crop  was in good or excellent condition at the start of the week. While that’s down from 72% seven days earlier, it’s still up from the 54% that earned top ratings at the same time last year.

Some 96% was planted, just ahead of the prior five-year average of 93% for this time of year, and 89% had emerged as of Sunday, up from the normal 85%, the USDA said.

Prices were lower overnight despite signs of demand for U.S. agricultural products. Exporters sold 132,000 metric tons of soybeans to China, the U.S. Department of Agriculture said in a report on Tuesday.

Soybean futures fell 2¢ to $8.68¾ a bushel overnight on the Chicago Board of Trade. Soymeal futures fell 20¢ to $293 a short ton, and soy oil declined 0.13¢ to 27.52¢ a pound.

Corn futures for July delivery fell 1¢ to $3.23¼ a bushel overnight.

Wheat futures for July delivery gained 1¢ to $4.86¾ a bushel, while Kansas City futures fell ¼¢ to $4.39½ a bushel. 

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2. Ethanol Production Hits Highest Level in Almost Three Months

Ethanol production rose to the highest in almost three months last week while inventories again declined, according to the Energy Information Administration.

Output of the biofuel increased to an average of 893,000 barrels a day in the week that ended on June 19, the EIA said in a report. That’s the eighth straight gain and the largest level since the seven days that ended on March 20.

In the Midwest, by far the biggest producing region, output was reported at an average of 857,000 barrels a day. That’s up from 803,000 barrels a week earlier and also the highest level since March 20.

Production on the East Coast came in at 11,000 barrels a day, on average, up from 10,000 a week earlier, the agency said. Output on the West Coast climbed to 8,000 barrels a day from 7,000 barrel the previous week.

Rocky Mountain production was unchanged at 10,000 barrels a day while Gulf Coast output declined to 8,000 barrels a day from 10,000 a week earlier, the EIA said.

Inventories, meanwhile, dropped to 21.034 million barrels. That’s down from 21.346 million a week earlier and the lowest since December 27, according to the government.

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3. Thunderstorms Forecast in Midwest and Southern Plains Thursday

Thunderstorms continue in the Midwest with precipitation and strong winds expected in parts of southern Minnesota and Wisconsin this evening, according to the National Weather Service.

Another two rounds of storms are forecast for the region on Friday, the NWS said in a report early this morning. The first will start early tomorrow morning followed by another system that’s expected to roll through late morning and last through the evening.

“A few storms could become severe with damaging winds and heavy rainfall as the main threats, especially from northeast Iowa to central Wisconsin,” the agency said. “Isolated hail is also possible.”

In southern Missouri and Illinois, meanwhile, isolated thunderstorms are on deck this afternoon and evening with lightning and heavy rain expected, the NWS said.

In the southern Plains, thunderstorms are possible this evening that are forecast to produce heavy rain, small hail and winds of up to 60 mph, the agency said.

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