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3 Big Things Today, October 6, 2022

Soybeans, Grains Lower Overnight; Weekly Ethanol Production Rebounds

1. Soybean, Grain Futures Drop in Overnight Trading

Soybean and grain futures were lower in overnight trading on reports that purchasers of U.S. agricultural products are pulling orders due to low water levels and slow movement on the Mississippi River.

Water levels have been dropping on the river amid dry weather for weeks.

Because of the slow movement, some exporters operating along the Gulf of Mexico have pulled offers for October and November delivery because of uncertainty around deliveries, Joel Karlin of Western Milling told The Wall Street Journal.

The U.S. Coast Guard said eight ships have grounded in the past week due to low water levels. On Friday, a grounding in Louisiana stopped river traffic in both directions for days, the U.S. Army Corps of Engineers told the Associated Press.

A strengthening dollar also is crimping demand for U.S. grain and beans. The dollar, which dropped to the lowest level in two weeks on Tuesday, rebounded yesterday and is up 0.1% overnight.

A stronger greenback makes dollar-denominated goods — in this case U.S. agricultural products — more expensive for overseas buyers.

Soybean futures for November delivery fell 11¢ to $13.58 ¾ a bushel overnight on the Chicago Board of Trade. Soymeal dropped $1 to $397.50 a short ton, while soybean oil lost 0.76¢ to $64.78 a pound.

Corn futures for December delivery were down 2 ½¢ to $6.81 ½ a bushel.

Wheat futures for December delivery dropped 8¢ to $8.94 a bushel, while Kansas City futures declined 7 ¼ ¢ to $9.83 a bushel.

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2. Ethanol Production Rises From Seven-Month Low

Ethanol output in the U.S. rebounded from a seven-month low last week while inventories declined, according to data from the Energy Information Administration.

Production rose to an average of 889,000 barrels a day in the week that ended on Sept. 30, the EIA said in a report.

That's up from 855,000 barrels a week earlier, which was the lowest since late-February.

In the Midwest, by far the biggest producing region, output jumped to an average of 840,000 barrels per day from 799,000 barrels the previous week, the agency said.

Gulf Coast output averaged 24,000 barrels per day, up from 23,000 barrels and the highest level in three weeks. West Coast production was up to 9,000 barrels a day, also the highest since Sept. 9.

Output in the Rocky Mountain region improved to 14,000 barrels per day on average, up from 12,000 barrels and hitting a three-week high, the government said.

East Coast production dropped to an average of 3,000 barrels a day last week.

Stockpiles, meanwhile, fell to 21.685 million barrels in the seven days that ended on Sept. 30. That's down from 22.691 million barrels the previous week, the EIA said in its report.

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3. Freeze Warnings Issued For Much of the Dakotas

Freeze warnings and watches have been issued for much of the Dakotas as cold weather envelopes the region, according to the National Weather Service.

In South Dakota, temperatures are expected to drop into the 20s overnight into Friday, the NWS said in a report early this morning.

A freeze warning will take effect starting at 9 p.m. tonight and last through 9 a.m. tomorrow morning.

In North Dakota, temperatures could drop as low as the mid-teens, the agency said.

Further south in the southern Plains, thunderstorms are forecast for today and tonight in the Oklahoma and Texas panhandles, the NWS said. The storms likely will rumble through the weekend.

"Thunderstorms will be possible at times Friday through Monday night, across portions of the Oklahoma and Texas Panhandles," the agency said. "If storms develop, they are expected to remain below severe levels at this time."

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