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3 Big Things Today, November 4, 2021

Wheat Futures Rise Overnight; Ethanol Production Hits Fresh All-Time High.

1. Wheat Futures Rise in Overnight Trading

Wheat futures were higher in overnight trading on concerns about availability of the grain and cold weather in U.S. growing areas.

Russia increased its export tax on wheat this week as part of its so-called floating-rate levy system that allows the government to raise or lower duties on shipments to ensure domestic supply.

Ukraine also will limit wheat exports this year, S&P Global said in a note to clients. The country will cap shipments of the grain at 25.3 million metric tons, the firm said.

The U.S. Department of Agriculture said in a monthly report that it sees Russian exports at 35 million metric tons, down from 38.5 million tons a year earlier.

Shipments from the Ukraine were pegged by the USDA at 23.5 million metric tons.  

Cold weather in the U.S. Southern Plains and eastern Midwest also may be giving prices a boost.

Temperatures were expected to fall into the mid- to upper-20s (°F.) overnight in parts of Kansas, Oklahoma, and Texas, and in counties in Arkansas and Missouri, according to the National Weather Service.

About 87% of the winter-wheat crop was planted as of Sunday, up from 80% a week earlier and just ahead of the prior five-year average of 86%, the USDA said. Some 67% of the crop had emerged from the ground.

Down from 46% a week earlier, 45% was rated good or excellent at the start of the week.

Prices in Chicago earlier this week hit the highest in almost nine years.

Soybeans were down slightly in overnight trading as the U.S. harvest rolls on. Growers have collected 79% of their soybeans, up from 73% the previous week and the normal 81%, the USDA said.

About 74% of U.S. corn was harvested at the start of the week, up from 66% a week earlier and the average of 66% for this time of the year, the agency said.  

Wheat futures for December delivery gained 4¼¢ to $7.85¼ a bushel overnight on the Chicago Board of Trade, while Kansas City futures rose 2¾¢ to $7.93½ a bushel.

Soybean futures for November delivery fell 4¢ to $12.40¼ a bushel. Soymeal declined $1.40 to $339.40 a short ton, while soy oil lost 0.31¢ to 60.72¢ a pound.

Corn futures for December delivery were up 1½¢ at $5.65½ a bushel.

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2. Ethanol Production Rises to Fresh Record High

Ethanol output last week rose slightly to a fresh record high and inventories surged, according to the Energy Information Administration.

Production of the biofuel increased to an average of 1.107 million barrels day in the week that ended on Oct. 29, the EIA said in a report.

That’s up from 1.106 million barrels, on average, the previous week and the highest on record.

In the Midwest, by far the largest producing region, output was unchanged at 1.051 million barrels a day, tied with last week for the highest ever for the area, the agency said.

East Coast production rose to an average of 13,000 barrels a day, up from 12,000 barrels a week earlier. That’s also the highest since the seven days that ended on Sept. 24.

Gulf Coast production was up to 24,000 barrels a day from 23,000 barrels the previous week, the EIA said.

Rocky Mountain production was unchanged at 10,000 barrels a day, and West Coast output remained at 9,000 barrels a day, on average, for the third straight week.

Ethanol inventories, meanwhile, rose to 20.129 million barrels a day in the week through Oct. 29.

That’s up from 19.925 million barrels a week earlier and the highest since the seven days that ended on Sept. 24, the EIA said in its report.


3. Hard-Freeze Warning in Effect in Parts of Southern Plains

A hard-freeze warning has been issued for parts of the Southern Plains where hard-red winter wheat has emerged from the ground and started growing.

Temperatures in southwestern Kansas and the Oklahoma and Texas panhandles fell as low as 26°F. overnight, the National Weather Service said in a report early this morning.

The freeze warning for the area is in effect until 10 a.m. local time, the NWS said.

Cold weather isn’t isolated to the southern Plains, though, as freeze warnings abound from eastern Oklahoma all the way to the eastern seaboard.

In southern Missouri and Illinois, temperatures were forecast to drop as low as 25°F. overnight, the agency said.

Counties in southern Indiana saw temperatures drop into the mid-20s overnight, the NWS said.

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