3 Big Things Today, October 16, 2020

Soybeans, Corn Higher Overnight; Ethanol Output Hits Five-Week High.

1. Soybeans and Corn Rise Overnight on Strong Demand

Soybean and corn futures were higher amid ongoing demand for U.S. supplies.

Exporters sold 261,000 metric tons of U.S. beans to China for delivery in the marketing year that started on Sept. 1, the Department of Agriculture said in a report yesterday.

Sales of 264,000 metric tons of soybeans and 420,000 tons of corn to China were reported by the agency on Wednesday. Mexico also bought 110,000 metric tons of corn from the U.S., the USDA said earlier this week.

Since the start of September, importing countries have pledged to buy 40.7 million metric tons of soybeans from the U.S., up 151% from the same time frame last year. Corn sales are now at 25.8 million tons, up 159%, according to the USDA.

The government will release its weekly export sales report today, a day late due to the Columbus Day holiday at the start of the week.

Wheat futures also were higher overnight on continuing dry weather in the U.S. southern Plains.

No rain has fallen in most of western Kansas and the Oklahoma and Texas panhandles in the past 30 days, according to the National Weather Service. Farmers are being forced to dust in their wheat, which could lead to reduced yield or crop failure.

Winter wheat planting in the U.S. was 68% complete as of Sunday, ahead of the prior five-year average of 61% for this time of the year, the Department of Agriculture said. About 41% of the crop had emerged, up from the 35% average.

In Kansas, 74% of the crop was planted and 50% had emerged at the start of the week, while in Oklahoma, 69% was seeded and 39% had emerged, the USDA said. The states are the largest producers of winter wheat in the U.S.

Soybean futures for November delivery jumped 7¼¢ to $10.69¼ a bushel overnight on the Chicago Board of Trade. Soymeal rose $2.50 to $374.60 a short ton, and soy oil added 0.33¢ to 33.5¢ a pound.

Corn futures for December delivery gained 4¢ to $4.07¾ a bushel.

Wheat futures for December delivery rose 4¢ to $6.22¼ a bushel overnight, while Kansas City futures were up 1¢ to $5.59 a bushel.

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2.  Ethanol Production Rises to Five-Week High, Stockpiles Also Increase

Ethanol production rose to the highest level in five weeks and inventories were the largest since the end of August, according to the Energy Information Administration.

Output of the biofuel in the seven days that ended on Oct. 9 averaged 937,000 barrels a day, up from 923,000 barrels a week earlier and the most since Sept. 4, the EIA said in a report.

In the Midwest, by far the largest producing region, output reached 900,000 barrels a day, up from an average of 881,000 barrels a day and the highest since July 24, the agency said.

East Coast production jumped to an average of 10,000 barrels a day from 6,000 the previous week. Rocky Mountain output last week was unchanged at 10,000 barrels a day, on average.

Gulf Coast output, meanwhile, plunged to an average of 9,000 barrels a day from 17,000 barrels, likely due to the effects of Hurricane Delta.

West Coast production dropped to 8,000 barrels a day, on average, from 9,000 barrels a week earlier.

Inventories, meanwhile, increased last week to 20.008 million barrels, the EIA said.

That’s up from 19.627 million barrels a week earlier and the largest amount of ethanol in storage since the seven days that ended on Aug. 28, the agency said in its report.

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3. Freeze Warnings in Effect in Much of Corn Belt While Snow Headed to the Northern Plains

Temperatures have plunged in much of the Midwest where freeze and frost warnings have been issued, according to the National Weather Service.

Freeze warnings have been issued in several states including much of eastern Iowa, southern Wisconsin, almost all of Illinois and Indiana, and much of Michigan, NWS maps show.

In eastern Iowa and northern Illinois and in a sliver of northeastern Missouri, temperatures overnight fell into the upper 20s. In northern Indiana and southern Michigan, temperatures hit 28°F., the agency said in a report earlier this morning.

Freeze warnings also are in effect in parts of eastern Colorado and western Kansas where recently planted hard-red winter wheat is emerging.

Temperatures overnight fell as low as 29°F., the NWS said. Frost warnings are in effect for large chunks of Kansas, Missouri, Iowa, and Nebraska this morning.

A low-pressure system will move from the northern Rockies into the northern Plains starting today, the agency said.

“The first notable snow accumulation of the season is expected in many areas from northeast Montana, into North Dakota and northern Minnesota, with a swath of 3 to 6 inches of snow forecast,” the NWS said.

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