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3 Big Things Today, October 22, 2020

Soybeans Higher, Wheat Lower Overnight; Ethanol Production Hits Three-Week Low.

1. Soybean Futures Rise, Wheat Falls in Overnight Trading

Soybeans were higher overnight on demand and adverse weather in Brazil while wheat declined as investors booked profits amid the recent price run-up.

Sales of U.S. soybeans and corn have been robust in recent weeks, with yesterday marking the end of a seven-day streak of announced purchases of agricultural products by overseas buyers.

Exporters this week announced sales of 132,000 metric tons of soybeans this week along with sales of 468,000 tons of corn to importers, the USDA said.

Last week, however, exporters reported sales of about 1.34 million metric tons of beans and 238,000 tons of corn to offshore buyers.

Since the beginning of September, importing countries have committed to buy 43.2 million metric tons of U.S. soybeans, a 142% increase from the same time frame last year, according to the government.

Buyers also have committed to purchase 26.5 million tons of corn from the U.S., up 156% from the same period in 2019, the government said.

Dry weather in Brazil has given prices a boost in recent weeks, though some rain is expected in the South American country next week, which could give crops a much-needed drink.

Soybean futures for December delivery rose 3¼¢ to $10.75¼ a bushel overnight on the Chicago Board of Trade. Soymeal gained $1.70 to $380.50 a short ton, and soy oil added 0.3¢ to 33.5¢ a pound.

Corn futures for December delivery were up ¾¢ to $4.14½ a bushel overnight.

Wheat was lower in overnight trading as investors who were long the market, or bet on higher prices, sold their contracts and liquidated their positions. Futures in Chicago had been up five straight days before today’s overnight decline.

Wheat futures for September delivery fell 4¼¢ to $6.25½ a bushel while Kansas City futures lost ¾¢ to $5.69 a bushel.

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2. Ethanol Output Drops to Three-Week Low While Inventories Decline

Ethanol production plunged to the lowest level in three weeks while stockpiles also declined, according to the Energy Information Administration.

Output in the seven days that ended on Oct. 16 averaged 913,000 barrels a day, down from 937,000 barrels a day a week earlier, the EIA said.

That’s the smallest amount since the week that ended on Sept. 25.

In the Midwest, by far the biggest producing region, output dropped to an average of 871,000 barrels a day, down from 900,000 barrels a day the previous week. That’s also the lowest in three weeks, the agency said.

That was the entirety of the regional declines for the week as Gulf Coast production was unchanged at 9,000 barrels a day, on average, and Rocky Mountain output was unchanged at 10,000 barrels a day, the EIA said.

East Coast production rose to 13,000 barrels a day from 10,000 barrels a week earlier, and West Coast output was up to 10,000 barrels a day from 8,000 barrels, the agency said.

Inventories, meanwhile, were down week-to-week.

Stockpiles declined to 19.721 million barrels in the week through Oct. 16 from 20.008 million seven days earlier, the EIA said in its report.


3. Winter Storm Slamming Dakotas, Freezes Hit Midwest, and Dry Weather Expected in Panhandles

National Weather Service maps are lit up this morning with winter weather hitting the northern Midwest, freeze warnings in the central Corn Belt, and extremely dry weather in the southern Plains.

Winter storm warnings and winter weather advisories are in effect for much of the Dakotas and central Minnesota this morning.

Along the border between North Dakota and South Dakota, another 4 to 6 inches of snow is forecast for today, the NWS said in a report early this morning. The winter storm warning will last until 10 p.m. tonight.

In much of western Kansas into central Nebraska, a freeze warning has been issued as temperatures are expected to drop as low as 23°F. overnight into Friday morning, the agency said.

A red-flag warning is in effect in the Oklahoma and Texas panhandles and a couple counties in southwestern Kansas until 8 p.m. today due to low humidity and strong winds.

Relative humidity is expected to drop to 10% today while winds will be sustained at 15 to 25 mph with stronger gusts possible, the NWS said.

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