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3 Big Things Today, March 24, 2022

Soybeans, Grains Lower Overnight; Ethanol Output Surges to Three-Month High.

1. Soybean and Grain Futures Fall in Overnight Trading

Soybean and grain futures were lower in overnight trading as some investors who were long the market, or bet on higher prices, likely sold contracts and booked profits as prices remain high.

Prices yesterday rose more than 22¢ and had earlier in the day touched the highest intraday price since late February. Futures rose amid potential demand for U.S. products, some unfavorable weather in South America, and the ongoing Russian attacks on Ukraine.

Investors stepped back in the overnight session despite the mostly bullish fundamentals.

Rain fell this week in parts of Mato Grosso and western Rio Grande do Sul, producing states in Brazil, said Donald Keeney, an agricultural meteorologist with Maxar.

Dry weather is expected to stress Brazil’s second corn crop, or safrinha crop, but improvements in the weather are expected next week, he said.

Precipitation also fell in some Argentina growing areas, the forecaster said. Rain will continue to build in the states of Cordoba, La Pampa, Santa Fe, Entre Rios, and Santa Fe.

In Ukraine, meanwhile, Russian attacks on several major cities continued as the conflict has now been going on for a month.

NATO said it believes between 7,000 and 15,000 Russian troops have been killed in action. Ukraine officials put the number of Russians killed right at 15,000. Moscow has said as of March 2 – the only official tally – 498 of its troops have been killed.

Russian casualties including those captured, injured, or missing in action are now between 30,000 and 40,000, NATO said.

The U.S. is expected to impose more sanctions on Russian political figures and oligarchs during a NATO summit in Brussels, where global leaders will discuss the best ways to handle the developing situation.

In response to the sanctions imposed on Russia, President Vladimir Putin has said he will require payment in rubles for natural gas to “unfriendly” countries. Natural gas prices in Europe jumped after the announcement.

Soybean futures for delivery fell 11½¢ to $17.07¼ a bushel overnight on the Chicago Board of Trade. Soymeal was down $2.40 to $482.70 a short ton, and soybean oil futures fell 0.82¢ to 75.15¢ a pound.

Wheat for May delivery dropped 13¼¢ to $10.92½ a bushel while Kansas City futures lost 11¾¢ to $10.99¾ a bushel.

Corn futures for May delivery fell 7¾¢ to $7.50 a bushel. 

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2. Ethanol Production Jumps to Highest This Year

Ethanol output jumped to the highest level since the end of December, while inventories surged to an almost-two-year high, according to the Energy Information Administration.

Production of the biofuel rose to an average of 1.042 million barrels a day in the week that ended on March 18, the EIA said in a report.

That’s up from 1.026 million barrels a day, on average, and the highest level since the seven days that ended on December 31.

In the Midwest, by far the biggest producing region, output averaged 988,000 barrels a day, up from 971,000 barrels a week earlier and the highest since January 14, the EIA said.

That, however, was the entirety of the weekly gains.

Production on the East Coast was steady at 11,000 barrels a day, and Rocky Mountain output was unchanged week-to-week at 13,000 barrels a day.

West Coast production was unchanged at 13,000 barrels a day, the agency said.

Gulf Coast output declined to an average of 21,000 barrels a day from 23,000 barrels the previous week, the government said.

Ethanol stockpiles last week surged to 26.148 million barrels, up from 25.945 million barrels the previous week.

That’s the highest level for inventories since the seven days that ended on April 24, 2020, the EIA said in its report.

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3. Wind and Dry Weather Forecast For Dakotas, Nebraska

Wind advisories and fire-weather watches have been issued for parts of North Dakota, South Dakota, and Nebraska for Thursday, according to the National Weather Service.

In much of North Dakota and western South Dakota, winds today will be sustained from 25 to 40 mph with gusts of up to 55 mph, the NWS said in a report early this morning.

Wind advisories will be in effect from noon to midnight local time.

“Sudden wind gusts can cause drivers to lose control, especially in lightweight or high-profile vehicles,” the agency said. “Strong winds can cause blowing dust, reduced visibility, and flying debris.”

Fire-weather watches have been issued in parts of South Dakota and much of eastern Nebraska starting tomorrow due to strong winds and low humidity.

Winds will be sustained at about 20 mph with gusts of up to 30 mph, the NWS said.

Relative humidity will fall to as low as 17%.

“Any fires that develop will likely spread rapidly,” the agency said. “Outdoor burning is not recommended.”

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