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3 Big Things Today, October 14, 2022

Grain Futures Fall Overnight; Ethanol Output Rises to Highest in a Month

1. Grain Futures Decline in Overnight Trading

Grain futures were lower in overnight trading as the U.S. corn harvest rolls on and in favorable weather in winter-wheat country.

Dry weather in much of the U.S. Corn Belt will allow farmers to accelerate harvest this week.

Little or no rain is expected in parts of the Midwest, as red-flag warnings have been issued for several states including Iowa, Illinois, and Nebraska — the three largest corn producers in the U.S.

Showers were forecast in northeastern parts of the region, and far northern areas likely will see precipitation today, said Don Keeney, an agricultural meteorologist with Maxar.

"Showers in northern areas will slow harvesting slightly, but drier weather elsewhere will favor fieldwork," he said.

About 31% of the U.S. corn crop was harvested at the start of the week, up from 20% seven days earlier and ahead of the prior five-year average of 30%, the Department of Agriculture said in a report.

Forty-four percent of soybeans were in the bin as of Sunday, double the previous week's total and ahead of the normal 38% for this time of year, USDA said.

U.S. winter-wheat producers continued with planting as rain this week into the weekend boosts crop prospects.

Rains likely will favor parts of Oklahoma and Texas this weekend. Precipitation in northern parts of the Winter-Wheat Belt will improve soil moisture for germination, though some regions in central and northern growing areas will remain dry, Keeney said.

About 55% of winter wheat was planted as of Sunday, up from 40% a week earlier but trailing the average of 58%, USDA said.

Russia, meanwhile, again has threatened to end an agreement that allows agricultural products to flow from Ukraine's ports in the Black Sea unless certain conditions are met. 

Gennady Gatilov, the Russian ambassador to the United Nations, told Reuters that the deal is not benefitting grain exports. If nothing changes and there's no benefit to Russian exporters, Moscow "will have to look at it in a different way," he said. 

Corn futures for December delivery were down 3 ¾¢ to $6.94 a bushel overnight on the Chicago Board of Trade.

Wheat futures for December delivery lost 8¢ to $8.84 ¼ a bushel, while Kansas City futures dropped 5 ¾¢ to $9.76 ½ a bushel.

Soybean futures for November delivery rose 3¢ to $13.98 ¾ a bushel. Soymeal added 40¢ to $411.40 a short ton, while soybean oil gained 0.22¢ to $66.67 a pound.

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2. Ethanol Output Jumps to Highest in a Month, EIA Says

Ethanol production in the U.S. jumped to the highest level in almost a month and inventories climbed in the seven days that ended on Oct. 7, according to the Energy Information Administration.  

Output rose to an average of 932,000 barrels per day, up from 889,000 barrels the previous week, the EIA said in a report.

That's the largest production level since the week that ended on Sept. 9.

In the Midwest, by far the largest producing area, output surged to an average of 881,000 barrels a day from 840,000 barrels a week earlier, the agency said. That's also the highest in a month.

East Coast production jumped to 10,000 barrels a day from 3,000 barrels the previous week.

That was the entirety of the gains as Rocky Mountain production was unchanged week-to-week at 14,000 barrels a day, the government said.

Gulf Coast output, meanwhile, dropped to 17,000 barrels a day from 24,000 barrels a week earlier, and West Coast production declined to an average of 8,000 barrels per day from 9,000 barrels.

Ethanol inventories rose to 21.863 million barrels in the seven days through Oct. 7, the agency said. That's up from 21.685 million barrels a week earlier, EIA said in its report.

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3. Dry Weather Persists as Red-Flag Warnings Issued From Utah to Ohio

Extremely dry weather persists throughout much of the Midwest as red-flag warnings have been issued from Utah, south into Arkansas, and east into Ohio, according to the National Weather Service.

In central and southern Kansas, winds will be sustained from 10 to 20 mph, with gusts of up to 30 mph, NWS said in a report early this morning.

Relative humidity will fall as low as 13%.

In much of Missouri, winds will gust up to 35 mph and humidity will drop as low as 15%, the agency said. Winds in Indiana likely will hit 40 mph today, while relative humidity will fall to 22%.

In parts of northern Illinois, a freeze warning is in effect until 8 a.m. local time this morning. Temperatures dropped to around 32 degrees Fahrenheit overnight, NWS said.

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