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3 Big Things Today, October 25

Wheat Futures Decline Overnight; Ethanol Production Bounces From Six-Month Low.

1. Wheat Futures Fall Below $5; Corn, Beans Little Changed

Wheat futures dropped below $5 a bushel and were lower overnight amid concerns about global production and exports.

Output in the 2017-2018 marketing year that ended on May 31 came in at a record 758.7 million metric tons, according to the USDA. That figure is expected to fall this year to 730.9 million tons, which is still historically high.

Stockpiles on May 31 totaled 274.9 million metric tons, also a record, and this year will fall to 260.2 million tons, which is the second highest ever, the USDA said.

Also weighing on prices is the strong dollar, which yesterday hit the highest value in more than two months, also threatening demand. A stronger greenback makes U.S. goods less attractive to overseas buyers and can crimp demand.

Wheat for December delivery dropped 4¢ to $4.95½ a bushel overnight on the Chicago Board of Trade, while Kansas City futures lost 3¾¢ to $4.93¼ a bushel.

Corn futures lost 1¾¢ to $3.66½ a bushel overnight.

Soybeans for November delivery fell 1¢ to $8.49¼ a bushel. Soy meal futures lost 60¢ to $305.50 a short ton, and soy oil rose 0.01¢ to 28.62¢ a pound.

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2. Ethanol Production Rebounds From Six-Month Low, Inventories Decline

Ethanol production rebounded from a multimonth low last week, while inventories declined, according to the Energy Information Administration.

Output of the biofuel averaged 1.024 million barrels a day in the seven days that ended on October 25, the EIA said in a report. That’s up from 1.011 million barrels the prior week, which was the lowest in almost six months.

Stockpiles, meanwhile, fell for the first time in almost a month. Inventories dropped to 23.897 million barrels, down from 24.13 million barrels the previous week, according to the government. The prior week’s total was the highest since March.

Ethanol producers received a boost earlier this month when President Trump signed an act allowing year-round sales of E15 blends. Iowa Senator Charles Grassley told reporters yesterday that the president must act quickly to avoid the appearance that the move was just a political stunt ahead of hard-fought mid-term elections.

The EPA said it plans to finish talks on the proposal by May and wants the new rule put in place before summer.

“EPA ought to speed it up,” Grassley said. “Otherwise it’s going to look like the president wasn’t serious in his announcement. We don’t need a lot of bureaucratic red tap with something that’s been discussed in Washington for four to five years.”

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3. Weather Mostly Dry as Areas Along Mississippi River Still Flooded

Weather maps look mostly dry again today, though there’s still some flooding along the Mississippi River along the Illinois borders with Iowa and Missouri.

The flood warnings start near Clinton, Iowa, and are still in effect for areas near Davenport, Burlington, south into the Quincy, Missouri, area all the way to Cape Girardeau, Missouri, according to the National Weather Service.

As much as 5 inches of rain fell in the past two weeks, and storms were incessant for a couple weeks through mid-October north of the affected regions, which is what’s caused the flooding.

The Mississippi River at Cape Girardeau was at 33.3 feet as of late Wednesday, topping the flood stage of 32 feet, the NWS said in a report. The good news is that water levels are slowly receding and floods are expected to end on Friday afternoon.

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