3 Big Things Today, September 20

Soybeans Turn Lower Overnight; Ethanol Production Rises, Stockpiles Fall

1. Soybeans Lower as Investors Return to Fundamentals

Soybeans were lower after yesterday’s double-digit gain as investors again traded on fundamentals.

Concerns about the escalating trade war with China are still lingering, though the effects of the latest round of tariffs weren’t as bad as expected.

President Trump on Monday said the U.S. would impose tariffs on another $200 billion worth of Chinese goods starting September 24. China followed up on Tuesday, saying it would put levies on $60 billion worth of U.S. items, also beginning on September 24.

U.S. production, meanwhile, is expected to jump to a record 4.693 billion bushels on yields of 52.8 bushels an acre, according to the Department of Agriculture.

Soybean futures for November delivery fell 3¢ to $8.27 a bushel overnight on the Chicago Board of Trade. Soymeal gained 40¢ to $308.80 a short ton and soy oil declined 0.05¢ to 27.45¢ a pound.

Corn rose ¼¢ to $3.46 a bushel overnight.

Wheat for December delivery lost 3¾¢ to $5.18¾  a bushel overnight, while Kansas City futures declined 2¾¢ to $5.23½ a bushel.

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2. Ethanol Production Rises From Five-Month Low; Green Plains Slowing, Not Shutting Facilities

Ethanol production rose week-to-week from an almost five-month low while inventories of the biofuel declined, according to the Energy Information Administration.

Output of the biofuel that’s made from corn in the U.S. jumped to an average of 1.051 million barrels a day in the week that ended on September 14, the EIA said in a report. That’s up from a 1.02-million-barrel-a-day average the prior week, which was the lowest since April.

Inventories, meanwhile, declined to 22.746 million barrels last week, down from 22.894 million barrels seven days earlier, the agency said.

Mixed reports came in yesterday as Reuters said ethanol-maker Green Plains was going to shut two plants in Iowa. The company later confirmed that was not the case, but that it was slowing production at the facilities.

Reuters reported that the company would shut its Superior, Iowa, plant and soon close its Lakota, Iowa, facility. Its plant in Fairmont, Minnesota, was reportedly going to run at half its capacity.

Jim Stark, the vice president of investor relations, told radio station KIOW that the Reuters story was incorrectly interpreted and that Green Plains has no intention of closing its Lakota site, but that the Superior and Fairmont facilities will slow production due in part to the ongoing trade war with China.

Another reason for the slowdown is the waivers being issued to refiners that allow them to skirt their responsibilities under the Renewable Fuels Standard, Stark said.

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3. Flash Flooding Reported Where Iowa, Minnesota, Nebraska, South Dakota Meet

Thunderstorms in northwestern Iowa, southwestern Minnesota, northeast Nebraska and southeastern South Dakota are producing locally heavy rainfall and flooding some low-lying areas in the area, according to the National Weather Service.

Flash flood warnings have been issued for several counties in the area while flood watches are now in effect.

Early Thursday morning, emergency management agencies reported several roads with water flowing over them after up to 2.5 inches of rain fell in a short period of time. More precipitation is expected in the region today.

Flash flooding is expected to continue for the next several hours, the NWS said.

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