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3 Big Things Today, October 21, 2021

Soybeans, Grains Lower Overnight; Ethanol Output Jumps to Two-Year High.

1. Soybean and Grain Futures Lower Overnight

Soybean and grain futures turned lower in overnight trading amid harvest pressure and profit-taking.

The U.S. harvest continues even as cold weather moves into the Midwest, as it tends to do this time of year.

Soybeans were 60% harvested at the start of the week, up from 49% a week earlier and ahead of the 55% prior five-year average, according to the U.S. Department of Agriculture.

In Iowa, 70% of the crop was in the bin, up from 56% the previous week and the average of 51%. Illinois soybeans were 51% collected, up from 43% a week earlier, but behind the normal 62%, the USDA said.

Iowa and Illinois are the biggest producers of soybeans and corn in the U.S.

About 52% of U.S. corn was harvested as of Sunday, up from 41% the previous week and the 41% prior five-year average, the government said in a report earlier this week.

In Iowa, 43% was in the bin vs. 30% the previous week and the normal 29%. Illinois growers had collected 62% of their corn, up from 55% a week earlier and ahead of the 59% average.

Prices also are being pressured by some profit-taking in the overnight session.

Wheat futures hit their highest level since Oct. 7, soybeans prior to this morning had risen five straight sessions, and corn was near a two-week high, leading some speculative investors who were long the market, or bet on higher prices, to sell contracts and book profits.  

Soybean futures for November delivery fell 9¢ to $12.46 a bushel overnight on the Chicago Board of Trade. Soymeal lost $3.90 to $324.50 a short ton, while soy oil dropped 0.92¢ to 63.78¢ a pound.

Corn futures for December delivery fell 2¾¢ to $5.36½ a bushel.

Wheat futures for December delivery declined 4¾¢ to $7.44½ a bushel, while Kansas City futures lost 7¾¢ to $7.52 a bushel.

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2. Ethanol Production Surges to Two-Year High

Ethanol output jumped to the highest level in more than two years last week while inventories also surged, according to the Energy Information Administration.

Production of the biofuel rose to an average of 1.096 million barrels a day in the week that ended on Oct. 15, the EIA said in a report.

That's up from 1.032 million barrels a day, on average, the previous week and the highest since the seven days that ended on June 7, 2019, the agency said.

Output that week also averaged 1.096 million barrels a day. The last time it was higher than that was on Aug. 3, 2018, when production averaged 1.1 million barrels.

In the Midwest, by far the largest producing region, production surged to a record 1.041 million barrels a day, up from 977,000 barrels a week earlier, the EIA said.

West Coast output rose to an average of 9,000 barrels a day from 8,000 the previous week.

That was the extent of the week’s gains as Gulf Coast production fell to 24,000 barrels a day, on average, from 25,000 barrels a week earlier, the agency said.

East Coast production fell to 11,000 barrels a day and Rocky Mountain output dropped to 10,000 barrels a day – each losing 1,000 barrels a day, on average, from the previous week, the EIA said in its report.

Stockpiles, meanwhile, rose to 20.08 million barrels in the seven days through Oct. 15.

That’s up from 19.847 million barrels the previous week and the highest level since Sept. 24, the agency said.


3. Freeze Warnings and Frost Advisories Issued in Central Midwest

A cold snap is moving through the central Midwest as freeze warnings and frost advisories have been issued in a wide chunk of land stretching from eastern Colorado into western Wisconsin, according to the National Weather Service.

In eastern Nebraska, a freeze warning will take effect tonight as temperatures are expected to drop as low as 30°F., the NWS said in a report early this morning.

“Although slightly sub-freezing temperatures are expected, a hard, killing freeze of 28°F. or colder is fairly unlikely,” the agency said.

In northern and central Iowa, temperatures overnight into Friday are forecast to drop to around 30°F.

The freeze warning goes into effect at 1 a.m. tonight and will end at 10 a.m. Friday morning, the NWS said.

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