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3 Big Things Today, May 19, 2022

Wheat, Corn Fall in Overnight Trading; Weekly Ethanol Production Unchanged.

1. Wheat, Corn Futures Fall Overnight

Wheat and corn futures were lower in overnight trading after the head of the United Nations said he was in contact with several countries including Russia about restoring grain shipments from Ukraine.

UN Secretary-General Antonio Guterres said on Wednesday that he’s been in contact with Ukraine, Russia, Turkey, the U.S., and European Union members about reinstating exports.

Food shortages already were an issue before Russia’s attacks on Ukraine started due to the COVID-19 pandemic, Guterres said in a speech yesterday.

The Russian invasion of Ukraine has exacerbated the global food crisis that was already worsened by the pandemic, climate change, and food inequality, he said.

Before the attacks began, Russia was forecast to be the world’s largest exporter of wheat and Ukraine was expected to be the third-biggest shipper, according to data from the U.S. Department of Agriculture.

The two countries combined produce almost a third of global wheat and half its sunflower oil, Guterres said. Russia is the world’s second-largest maker of potash, he said.

“Russia must permit the safe and secure export of grain stored in Ukrainian ports,” Guterres said. “Alternative transportation routes can be explored – even if we know that by itself, they will not be enough to solve the problem. Russian food and fertilizers must have unrestricted access to world markets without indirect impediments.”

Soybean futures were higher as rain in parts of the Midwest likely will further delay planting that’s already well behind the normal pace for this time of year.

Rainfall is expected in parts of Missouri, Illinois, and the Dakotas today.

About 30% of the U.S. soybean crop was planted at the start of this week, behind the prior five-year average of 39%, the USDA said. Some 9% had emerged, trailing the average of 12%.

Corn planting was further behind with 49% in the ground as of Sunday, well behind the normal 67%, the government said. Only 14% had emerged, missing the normal 32% for this time of year.

Wheat for May delivery lost 18¾¢ to $12.12 a bushel overnight on the Chicago Board of Trade while Kansas City futures dropped 27¾¢ to $12.96¾ a bushel.

Corn futures were down 4¾¢ to $7.76½ a bushel.

Soybean futures for July delivery rose 4¢ to $16.66¾ a bushel. Soymeal added $3.20 to $417.20 a short ton, while soybean oil futures fell 1.75¢ to 78.8¢ a pound.

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2. Ethanol Production Unchanged While Inventories Fall

Ethanol output was unchanged week-to-week while inventories fell to the lowest level since mid-January, according to data from the Energy Information Administration.

Production of the biofuel remained at 991,000 barrels a day, on average, in the week that ended on May 13, the EIA sad in a report.

In the Midwest, by far the biggest producing region, output fell to an average of 931,000 barrels a day, down from 941,000 barrels the previous week.

Offsetting the area’s declines were gains in three out of the four remaining regions, the EIA said.

East Coast output jumped to an average of 12,000 barrels per day, up from 5,000 barrels a week earlier, the agency said. That’s the highest level since April 22.

Gulf Coast production increased to an average of 25,000 barrels a day from 24,000 barrels a week earlier, and Rocky Mountain output rose to 14,000 barrels a day, up from 12,000 barrels the previous week – both three-week highs.

West Coast output was unchanged at 9,000 barrels a day, on average, for the fourth week in a row, the government said.

Ethanol stockpiles, meanwhile, fell to 23.791 million barrels in the seven days that ended on May 13.

That’s down from 24.14 million barrels a week earlier and the lowest inventory level since January 14, the EIA said in its report.  


3. Red-Flag Warnings Issued as Dry Weather Continues in Southern Plains

Red-flag warnings have been issued for a wide chunk of land stretching from northern Nebraska to the Texas-Mexico border and west into California amid extremely dry weather, according to the National Weather Service.

In central Nebraska, winds are forecast from 20 to 30 mph with gusts of up to 45 mph, the NWS said in a report early this morning.

Relative humidity will drop as low as 10%.

In western Kansas, winds will be sustained from 15 to 20 mph with gusts up to 30 mph, the agency said. Humidity will fall as low as 8%.

“Any fires that start will have extreme fire behavior and spread rapidly,” the NWS said.

Farther east in Missouri and western Illinois, scattered thunderstorms are in the forecast today with some turning severe.

Some of the storms may produce large hail, strong winds, and possibly tornadoes, the agency said.

The threat of severe weather will continue tomorrow into the weekend, the NWS said.

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