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3 Big Things Today, September 22, 2022

Soybeans Modestly Higher Overnight; Ethanol Production Plunges to 19-Month Low

1. Soybeans Slightly Higher in Overnight Trading

Soybean futures rose and corn was little changed in overnight trading as dry weather is expected in parts of the U.S. Midwest in the next few days, though the lack of rain at this point may not have much effect on crops.

"Only marginal relief (is expected) for driest 35% of corn and soy (mainly western Midwest) but impacts diminishing rapidly as crops mature," Commodity Weather Group said in a report.

Three percent of U.S. soybeans were harvested as of Sunday, while 42% of the crop was dropping leaves, the Department of Agriculture said this week.

Seven percent of corn was in the bin at the start of the week, and 40% was mature, the USDA said. About 87% was dented.

Wetter weather is expected near the Great Lakes and the harvest in the Midwest likely will speed up next week after rain leaves the area, CWG said in its report.

Wheat futures were lower overnight as speculative investors who were long the market, or bet on higher prices, sold contracts and booked profits after prices yesterday reached the highest in two months.

Prices before the overnight session had risen on concerns that Russia plans to escalate tensions by annexing territories in eastern and southern Ukraine it now controls. The U.S. and other allies have said they will not recognize any elections by Russian authorities.

Vladimir Putin, the president of Russia, has openly questioned an agreement brokered by Turkey and the United Nations that allows grain to be shipped from Ukraine's ports. Rising tensions won't help further prospects for exports. 

Soybean futures for November delivery gained 4¢ to $14.66 a bushel overnight on the Chicago Board of Trade. Soymeal added $2.20 to $441 a short ton, while soybean oil rose 0.15¢ to $65.15 a pound.

Corn futures for December delivery rose 1¢ to $6.86 ½ a bushel.

Wheat futures for December delivery fell 6¢ to $8.97 ¾ a bushel, while Kansas City futures were down 4 1/4¢ to $9.62 ¾ a bushel.

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2. Ethanol Production Falls to Lowest Since February 2021

Ethanol output last week dropped to the lowest level in almost 19 months while inventories fell to lowest level this year, according to data from the Energy Information Administration.

Production of the biofuel dropped to an average of 901,000 barrels per day in the week that ended on Sept. 16, the EIA said in a report.

That's down from 963,000 barrels a day, on average, and the lowest level since Feb. 26, 2021.

In the Midwest, by far the biggest producing region, output fell to 850,000 barrels a day, on average, from 902,000 barrels a week earlier. That's also the lowest output since late February 2021.

Gulf Coast production plunged to an average of 19,000 barrels a day last week, down from 25,000 barrels the previous week. Rocky Mountain output was down to 12,000 barrels from 15,000 a day, on average, the agency said.

West Coast production was down to 8,000 barrels from 9,000 barrels a week earlier.

The only region where output didn't fall was on the East Coast, where it was unchanged at an average of 12,000 barrels per day.

Ethanol inventories, meanwhile, declined to 22.501 million barrels in the week through Sept. 16.

That's down from 22.843 million barrels the previous week and the lowest level of stockpiles since the seven days that ended on Dec. 31, the EIA said in its report.

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3. Frost Advisories in Effect in Parts of the Dakotas, Minnesota

Frost advisories have been issued for much of North Dakota and parts of northern South Dakota and northern Minnesota, according to the National Weather Service.

In central North Dakota, temperatures will fall into the upper 20s to mid-30s, resulting in frost formation, the NWS said in a report early this morning.

A wind advisory also is in effect in the area where wind will be sustained around 30 miles an hour with gusts of up to 50 miles per hour expected.

The frost advisory in central and western North Dakota is in effect until 10 am central while the wind advisory runs through the evening, the agency said.

Further south in parts of eastern Nebraska and western Iowa, showers and thunderstorms are expected tonight, though no severe weather is in the forecast.

Storms also will fire up tomorrow morning with nothing severe expected, the NWS said.

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