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3 Big Things Today, September 13

Soybean Futures Lower Overnight; Ethanol Production Drops to Lowest Since April.

1. Soybeans Down Slightly After USDA Report, Corn Rises

Soybeans were lower in overnight after the bearish USDA report yesterday, while corn somehow remained higher.

The USDA raised its estimates on soybean yield to 52.8 bushels an acre, bumping forecast production to 4.693 billion bushels for the 2018-2019 marketing year that started on September 1. Ending stockpiles were raised to 845 million bushels from the previous forecast for 785 million.

The government’s corn-yield projection was raised to 181.3 bushels an acre, up from the August outlook for 178.4 bushels. Output was increased to 14.827 billion bushels from 14.586 billion. Inventories at the end of the marketing year are now pegged at 1.774 billion bushels, up from the previous forecast for 1.684 billion, the USDA said.

Soybeans finished about 8¢ higher yesterday, while corn dropped more than 14¢. The reason behind the drop in corn prices was obviously the USDA report, analysts said. Soybean’s gain, however, was a bit surprising.

Some analysts attributed the oilseed’s gain yesterday and this morning’s increase in corn futures to a “buy the rumor, sell the fact” as many traders and producers don’t believe the crops are as good as projected.

Selling has returned this morning in soybeans, but the small decline shows bears lack conviction, at least in the overnight session.

Soybean futures for November delivery fell 3½¢ to $8.36½ a bushel overnight on the Chicago Board of Trade. Soy meal lost $2.50 to $315.90 a short ton, and soy oil fell 0.13¢ to 27.86¢ a pound.

Corn rose 1¼¢ to $3.53¾ a bushel overnight.

Wheat lost 2¾¢ to $5.04 a bushel in Chicago, while Kansas City futures fell 1½¢ to $5.05¼ a bushel in overnight trading.

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2. Ethanol Production Plunges to Lowest in Five Months in Seven Days Through September 7

Ethanol output in the U.S. plunged in the week that ended on September 7 to the lowest level in almost five months while inventories rose.

Production of the biofuel, which is made from corn, fell to an average of 1.02 million barrels a day last week, according to the Energy Information Administration. That’s down from an average of 1.087 million the prior week and the lowest since April 20.

Inventories of ethanol, meanwhile, rose to 22.894 million barrels as of last week, the government said in a report. That’s up from 22.703 million barrels seven days earlier.

The USDA said yesterday it now expects 5.65 billion bushels of corn to be used to produce ethanol in the 2018-2019 marketing year. That’s up from the previous month’s outlook for 5.625 billion bushels.

In other news, the USDA is expected to release its weekly Export Sales Report this morning. Analysts expect corn sales from 800,000 to 1.2 million metric tons, soybean sales from 500,000 to 1 million metric tons and wheat sales from 300,000 to 500,000 tons, according to Allendale.

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3. All Eyes on Carolinas as Hurricane Florence Set to Make Landfall

All eyes are now on the Carolina coast as Hurricane Florence is expected to make landfall in less than 24 hours.

The “monster” storm is now expected to hit land around 2 a.m. local time, with North Carolina, the nation’s second-biggest hog producer, and South Carolina bearing the brunt of the impact, according to the National Weather Service.

Maximum sustained winds are now at 110 mph, which is down from 130 mph recorded yesterday.

The NWS said in a report early Thursday morning that “a life-threatening storm surge” is likely along the coasts in both states.

“Life-threatening, catastrophic flash flooding, and prolonged significant river flooding are likely over portions of the Carolina and the southern and central Appalachians late this week and into early next week,” the agency said, “as Florence is expected to slow down as it approaches the coast and moves inland.”

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