3 Big Things Today, October 1, 2020

Soybeans, Corn Extend Gains Overnight; Ethanol Production Drops to Three-Month Low.

1. Soybeans, Corn Rise as Quarterly Stocks Miss Expectations

Soybean and corn futures were higher overnight, extending yesterday’s double-digit gains, on lower-than-expected stockpiles.

Inventories of soybeans on Sept. 1 totaled 523 million bushels, down 42% year-over-year, the U.S. Department of Agriculture said in a report.

Analysts had pegged stockpiles at the beginning of last month at 576 million bushels, according to researcher Allendale.

Corn stocks at the start of September were reported at 2 billion bushels, down 10% from a year earlier, the agency said. That’s below expectations from analysts for 2.25 billion bushels.

All wheat inventories came in at 2.16 billion bushels, down 8% from the same date last year, the USDA said. Analysts had expected 2.24 billion bushels.

Prices also are being given a bump by extremely cold weather that’s moved into the western Corn Belt. Freeze warnings have been issued in parts of Nebraska and Minnesota for tonight, while a frost advisory will be in effect for a large chunk of the Midwest.

Soybean futures for November delivery rose 7¼¢ to $10.30¾ a bushel overnight on the Chicago Board of Trade. Soymeal added $2.40 to $345.20 a short ton, and soy oil gained 0.09¢ to 33.22¢ a pound.

Corn futures jumped 3½¢ to $3.82½ a bushel.

Wheat futures for September delivery fell ¼¢ to $5.77¾ a bushel, while Kansas City futures dropped 2¢ to $5.07¾ a bushel.

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2.  Ethanol Production Drops to Three-Month Low; Inventories Also Decline

Ethanol output plunged to the lowest level in more than three months last week and stockpiles also dropped, according to the Energy Information Administration.

Production of the biofuel declined to an average of 881,000 barrels a day in the week that ended on Sept. 25, the EIA said in a report.

That’s down from 906,000 barrels a day, on average, a week earlier and the lowest output since the seven days that ended on June 12.

In the Midwest, by far the biggest producing region, production dropped to an average of 835,000 barrels a day from 865,000 barrels the previous week, the government said.

That was the entirety of the weekly drop as the remaining regions were unchanged or rose.

West Coast output was unchanged at an average of 9,000 barrels a day.

Rocky Mountain production increased to 10,000 barrels a day, on average, from 8,000 the previous week, Gulf Coast output rose to 14,000 barrels a day from 11,000 barrels, and East Coast production was up to an average of 13,000 barrels a day from 12,000 barrels, the EIA said.

Stockpiles, meanwhile, declined to 19.691 million barrels on Sept. 25.

That’s down from 19.997 million barrels a week earlier and the lowest inventory level since the seven days that ended on Dec. 30, 2016.  

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3. Freeze Warnings Issued For Parts of Nebraska and Minnesota Tonight

Freeze warnings have been issued for much of central Nebraska and several counties in Minnesota, according to the National Weather Service.

In central Nebraska, the freezing weather is expected overnight into Friday morning with lows of around 28°F. expected, the NWS said in a report early this morning.

The agency said the forecast is somewhat uncertain as a blanket of clouds may roll into the region, which would keep temperatures above freezing.

“However, if the clouds clear out for a few hours then a freeze is likely given the light winds,” the NWS said.

In Minnesota, meanwhile, temperatures are expected to fall to as low as 29°F. overnight.

A frost advisory has been issued for a large chunk of land stretching from northern Kansas north through South Dakota and east to the Wisconsin shore of Lake Michigan.

Temperatures in much of Iowa will fall into the low- to mid-30s overnight tonight, the NWS said.

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