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3 Big Things Today, March 5, 2020

Soybeans, Corn Lower Overnight; Ethanol Production Jumps to a One-Month High.

1. Soybeans and Corn Were Lower in Overnight Trading

Soybeans and corn were lower in overnight trading as fears about the spread of the coronavirus outweighed optimism that trade will return to normal at some point.

An 11th person has died in the U.S. from the disease including the first outside of Washington state, a person in California. The victim had been on a cruise ship, and all passengers are being tested for the virus.

So far in the U.S., there have been about 160 confirmed cases.

Globally, there were 93,090 confirmed cases as of yesterday, with 80,422 of those in China. Deaths worldwide have reached 3,198, with 2,984 of those in China, according to the World Health Organization. Argentina, Chile, Poland, and Ukraine have all reported cases.

It’s so far unclear how much of an effect the coronavirus, or COVID-19, will have on the global economy. Refinitiv said in a report this week that its spread will have a “significant” impact on commodities trading globally.

Agriculture trading will “continue to see significant issues” amid weaker demand from China, the researcher said.

Still, there’s optimism about how central banks and financial institutions are handling the situation.

The U.S. Federal Reserve on Tuesday cut its federal funds rate by 50 basis points in an emergency move in a bid to boost the economy. The Bank of Canada followed suit on Wednesday.

Soybean futures for May delivery fell 1½¢ to $9.05¾ a bushel overnight on the Chicago Board of Trade. Soy meal fell $1 to $307.90 a short ton, and soy oil lost 0.11¢ to 29.63¢ a pound.

Corn futures 3½¢ to $3.81¼ a bushel overnight.

Wheat futures for May delivery rose ¼¢ to $5.18½ a bushel, while Kansas City futures lost ¾¢ to $4.52½ a bushel.


2. Ethanol Production Last Week Surged to a One-Month High While Stockpiles Rose Slightly

Ethanol production last week jumped to the highest in a month while stockpiles were up slightly, according to the U.S. Energy Information Administration.

Output in the seven days that ended on February 28 averaged 1.079 million barrels a day, the EIA said in a report. That’s up from 1.054 million a week earlier and the highest level since January. 31.

In the Midwest, by far the biggest-producing region, output of the biofuel jumped to 1.007 million barrels, on average, from 977,000 a week earlier, the agency said.

Gulf Coast production increased to 24,000 barrels a day, on average, from 22,000 barrels seven days earlier. Rocky Mountain output was unchanged at an average of 14,000 barrels a day.

West Coast production declined to 14,000 barrels a day from 15,000 barrels, and East Coast output plunged to an average of 19,000 barrels a day from 26,000 barrels the previous week.

Inventories also rose, albeit slightly. Stockpiles in the seven days that ended on February 28 came in at 24.964 million barrels, up from 24.718 million a week earlier, the EIA said.

In other news, the USDA’s weekly Export Sales Report is due this morning. Analysts are expecting corn sales from 700,000 to 1.3 million metric tons, soybean sales from 500,000 to 1.025 million metric tons, and wheat sales from 375,000 to 675,000 metric tons, according to researcher Allendale.


3. Red-Flag Warning in Nebraska Spreads to Kansas, Missouri and Southern Iowa

A red-flag warning – an indication that conditions are ripe for wildfires – that was only in parts of Nebraska yesterday has spread and is now in effect for much of Kansas and Missouri and counties in southern Iowa, according to the National Weather Service.

In central Nebraska and Kansas, humidity levels are expected to be around 15% to 20% this afternoon with wind gusts of up to 45 mph, the NWS said in a report early this morning.

Sustained winds in the region are expected to be around 20 to 30 mph.

In southeastern Iowa and northeastern Missouri, meanwhile, the danger for a fire will be extremely high this afternoon, the agency said.

Winds of 25 to 35 mph and gusts of up to 50 mph are expected. The strong winds, combined with dry vegetation and low humidity, will create “an extreme fire danger this afternoon,” the NWS said in its report.

Farther north, a strong wind advisory is in effect for much of North Dakota, South Dakota, Minnesota, and the northern three fourths of Iowa, according to the agency.

Wind gusts in parts of South Dakota and western Minnesota are expected to reach 45 mph today with sustained winds of 20 to 30 mph, the NWS said.

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