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3 Big Things Today, October 12

Soybean Futures Rise Overnight; Ethanol Stockpiles Jump to Highest Since March.

1. Soybeans Higher After WASDE Report, Corn Little Changed

Soybeans were higher in overnight trading on Friday after the USDA unexpectedly lowered its forecast for production.

Output in the 2018-2019 marketing year was pegged by the USDA at 4.69 million bushels in yesterday’s World Agricultural Supply and Demand Estimates (WASDE) Report. That’s down from 4.693 billion bushels forecast last month and well below expectations.

Yield is seen lower at 88.3 bushels an acre, down from the month-earlier projection of 88.9 bushels, the USDA said. The government’s ending stockpiles estimate was raised to 885 million bushels from 845 million, but that’s still below analyst estimates.

Corn production forecasts were also lowered by the USDA to 14.778 billion bushels from 14.827 billion a month ago. Yield is now seen at 180.7 bushels an acre, down from 181.3 bushels. The agency’s inventories estimate was raised to 1.813 billion bushels from 1.774 billion a month earlier, but that’s also still below expectations.

Soybeans for November delivery rose 5¢ to $8.63¼ a bushel overnight on the Chicago Board of Trade. Soy meal futures fell 30¢ to $316.50 a short ton, and soy oil added 0.20¢ to 29.22¢ a pound.

Corn for December delivery fell ¼¢ to $3.69 a bushel overnight.

Wheat for December delivery rose 4¢ to $5.12 a bushel overnight, while Kansas City futures gained 3¾¢ to $5.17½ a bushel.

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2. Ethanol Production Rebounds Week to Week, Stockpiles Jump to Highest Since March

Ethanol production rebounded from the lowest level in five months, while stockpiles of the biofuel surged.

Output of ethanol in the U.S., where it’s made from corn, increased to an average of 1.04 million barrels a day in the week that ended on October 5, according to the Energy Information Administration. That’s up from 1.015 million barrels, on average, the prior week, which was the lowest level since April.

Stockpiles, meanwhile, jumped week to week to 24.021 million barrels, the EIA said in a report. That’s up from 23.445 million barrels the prior week and the highest amount since the seven days that ended on March 9, government data show.

It’s been a good week for the ethanol industry after President Trump ended a rule banning sales of E15 ethanol blends year-round. The rule was put in place for environmental reasons, but its efficacy had been questionable.

That riled the oil industry, but the Renewable Fuels Association was obviously pleased with the announcement.

“Securing fair market access for E15 and other higher blends has been our top regulatory priority for several years, and we are pleased that the first official step in the process is being taken,” RFA Chief Executive Geoff Cooper said in a statement.

It’s also been a good week for Green Plains, which this week agreed to purchase ethanol storage assets and railcar leases from its subsidiary Green Plains Partners.

RBC Capital Markets analysts said they viewed the acquisition of the assets positively. Green Plains sold three of its ethanol plants to Valero for $328 million, which was also in line with the company’s strategic optimization plan.

Green Plains stock on Thursday closed at its highest level since June 27.

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3. Freeze Warnings in Effect For Southern Minnesota, Northern Iowa Where Floods Still Linger

Freeze warnings are still in effect for parts of southeastern Minnesota and northeastern Iowa, which likely will end growth for any crops that were still developing, according to the National Weather Service.

Temperatures have fallen into the mid and upper 20s across much of the region, the NWS said in a report early Friday morning.

It’s been drier since yesterday in the area, but flooding is still a major issue. Several rivers, streams, and tributaries in parts of eastern Iowa and southern Wisconsin are still running over their banks due to the runoff from the prior weeks’ rains.

Meanwhile, in the Southern Plains, snow is expected to fall starting this weekend with some areas seeing up to 6 inches, the NWS said. Parts of the western Oklahoma and Texas panhandles, eastern Colorado, and eastern New Mexico will see snowfall.

Up to half a foot is expected in parts of the extreme western Oklahoma panhandle with diminishing amounts forecast east of there, according to the agency.

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