3 Big Things Today, March 4, 2021

Soybeans Rise Modestly Overnight; Weekly Ethanol Production Rebounds.

1. Soybean Futures Rise Slightly in Overnight Trading

Soybeans were modestly higher in overnight trading as investors focus more on adverse weather in parts of South America instead of slack demand for U.S. supplies.

Showers earlier this week fell in parts of Mato Grosso, central Mato Grosso do Sul, Sao Paulo, and other growing states in Brazil, according to Donald Keeney, an agricultural meteorologist with Maxar.

Rainfall is expected to continue in central and northwestern growing areas in the South American country, he said in a report yesterday.

The rains likely will continue to delay planting of the country’s safrinha, or second, corn crop, which would mean producers would be harvesting during Brazil’s dry season, Weathertrends360 said.

Despite low global supplies and production problems in Brazil, the world’s largest exporter of soybeans, demand for U.S. supplies hasn’t been exactly robust in the past few weeks.

Exporters haven’t reported soybean sales of 100,000 metric tons or more since Jan. 29, according to the U.S. Department of Agriculture.

The only corn sales reported were on March 2, when the USDA said exporters sold 175,000 metric tons of the grain to Japan. Prior to that the last reported sale of 100,000 metric tons or more was on Feb. 12, government data show.

The USDA last week said corn and wheat sales in the week that ended on Feb. 18 both dropped to marketing-year lows and soybean sales plunged 63% from the prior seven-day period.

The agency is scheduled to release its weekly export-sales report this morning.

READ MORE: Weak sales pull ag markets modestly lower Thursday

Soybean futures for May delivery rose 2½¢ to $14.10 a bushel overnight on the Chicago Board of Trade. Soymeal was up 20¢ to $419 a short ton, and soy oil rose 0.47¢ to 50.25¢ a pound.

Corn dropped ¾¢ to $5.34½ a bushel.

Wheat futures for May delivery lost 1¼¢ to $6.54¾ a bushel, while Kansas City futures gained 2½¢ to $6.28½ a bushel.

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2. Ethanol Production Jumps Week-to-Week While Inventories Slide

Ethanol output rebounded from the previous week’s weather-related decline while inventories dropped to the lowest level in almost three months, according to the Energy Information Administration.

Production of the biofuel jumped to an average of 849,000 barrels a day in the week that ended on Feb. 26, the EIA said in a report.

That’s up from 658,000 barrels a day the previous week, the agency said, when winter storms slammed several parts of the country all at once, leading to power outages and water shortages in some areas.

In the Midwest, by far the biggest producing region, output increased to 811,000 barrels a day, on average, from 631,000 barrels a day.

Gulf Coast production surged to an average of 10,000 barrels a day from 2,000 barrels the previous week. The region was hit hard by the winter storm, which knocked out electricity and water to millions of people.

Rocky Mountain output rose to 9,000 barrels a day from 5,000 barrels the previous week, and West Coast production improved to 9,000 barrels a day, on average, from 8,000 barrels, the EIA said.

East Coast output was unchanged at 11,000 barrels a day.

Ethanol stockpiles, meanwhile, dropped to 22.425 million barrels last week, the agency said.

That’s down from 22.785 million barrels the previous week and the lowest level since the seven days that ended on Dec. 4, the EIA said in its report.

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3. Red-Flag Warning Issued in Parts of Oklahoma and Texas Panhandles

A red-flag warning has been issued for parts of the Oklahoma and Texas panhandles and much of eastern New Mexico, according to the National Weather Service.

Winds are forecast to be sustained from 20 to 30 mph with gusts up to 40 mph, the NWS said in a report early this morning. Relative humidity is expected to be around 13%.

The warning is in effect from 11 a.m. to 7 p.m. local time.

Flooding is expected along several waterways including the Mississippi River, the agency said.

At the Tunica Mhoon landing, the river is expected to rise to 30 feet by Tuesday morning before falling the following day. It was at 23.1 feet as of yesterday evening, the NWS said.

The Mississippi River at Caruthersville was at 30.6 feet as of Wednesday evening and is forecast to rise above flood stage of 32 feet early today and will reach 34 feet on Saturday. It will remain at that level through the middle of the month, the agency said.

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