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3 Big Things Today, September 15, 2022

Wheat Futures Lower Overnight; Ethanol Production Plunges to Four-Month Low

1. Wheat Futures Decline in Overnight Trading

Wheat futures were lower in overnight trading as speculative investors who were long the market, or bet on higher prices, sold contracts and booked profits after prices hit the highest level in nine weeks.

Prices had been rising amid concerns about global supplies.

Russian President Vladimir Putin said recently that he is considering scrapping an agreement allowing Ukrainian ships carrying agricultural products out of the war-torn country.

Putin accused Kiev of shipping grain to wealthy European countries instead of areas where food insecurity is highest. That was countered by Ukrainian officials who showed destinations for vessels in Africa, Asian and Europe.

Still, no actions have been taken on the six-week-old deal, though Putin and Turkey President Recep Tayyip Erdogan, a Putin ally, are scheduled to meet later this week to discuss the agreement.

Wheat prices also are declining as the spring harvest rolls on in the U.S.

About 85% of the spring-wheat crop was collected as of Sunday, up from 71% a week earlier but still behind the prior five-year average of 89%, the U.S. Department of Agriculture said in a report earlier this week.

Winter-wheat planting also is underway in earnest with 10% of the crop in the ground, up from 3% the previous week and ahead of the 7% average for this time of the year, the USDA said.

Wheat futures for December delivery fell 7 1/4¢ to $8.65 a bushel overnight on the Chicago Board of Trade, while Kansas City futures lost 4 1/2¢ to $9.42 ½ a bushel.

Soybean futures for November delivery rose 3¢ to $14.58 a bushel. Soymeal added $1.60 to $424.70 a short ton, while soybean oil gained 0.18¢ to $65.05 a pound.

Corn futures for December delivery were up 1¢ to $6.83 ¼ a bushel.

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2. Ethanol Output Drops to Lowest in Over Four Months

Ethanol production plunged to the lowest level in more than four months while inventories also declined, according to data from the Energy Information Administration.

Output in the seven days that ended on Sept. 9 averaged 963,000 barrels per day, the EIA said in a report.

That's down from 989,000 barrels a week earlier and the lowest since April 22.

In the Midwest, by far the biggest producing region, production dropped to 902,000 barrels per day on average from 931,000 barrels the previous week, the agency said.

That was the entirety of the losses for the week.

East Coast production was unchanged for a second straight week at 12,000 barrels per day, while West Coast output remained at 9,000 barrels a day, the EIA said.

Gulf Coast output rose week-to-week to an average of 25,000 barrels per day, up from 23,000 barrels the previous week.

Rocky Mountain production was up to 15,000 barrels a day from 14,000 barrels a week earlier, the government said.

Stockpiles, meanwhile, dropped to the lowest level in almost two months.

Ethanol inventories declined to 22.843 million barrels in the week through Sept. 9, down from 23.533 million barrels a week earlier and the lowest since the seven days that ended on June 24, the EIA said in its report.

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3. Storms Expected in Parts of Nebraska, Some Possibly Severe

Scattered showers are expected in parts of western and central Nebraska today with some turning severe this afternoon, according to the National Weather Service.

The biggest hazards will be strong winds, large hail and lightning, the NWS said in a report early this morning.

Storms will continue tomorrow afternoon in the state as the threat of hail and lightning persist. Thunderstorms may last into the weekend, the agency said.

Further south in parts of eastern Oklahoma into central Arkansas, a combination of high temperatures, low humidity and strong winds will create extremely dry conditions, the NWS said.

"Unseasonably hot weather will continue through much of next week," the agency said. "Increasing southerly winds will be offset somewhat by increasing humidity values over the weekend, but fire weather conditions will need to be monitored closely over the next week."

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