3 Big Things Today, January 11, 2023

1. Soybean Futures Rise in Overnight Trading

Soybeans jumped in overnight trading amid continued dry weather in Argentina and as investors square positions ahead of tomorrow's World Agricultural Supply and Demand Estimates (WASDE) report.

Precipitation will be limited to only the "edges" of Argentina in the next 10 days, allowing crop stress to rebuild in about two-thirds of soybean and corn-growing areas, Commodity Weather Group said in a report.

Temperatures this week are in the 90s and low-100s Fahrenheit. The hot weather will continue through much of next week, adding stress to crops that have been facing extremely warm and dry conditions for much of the growing season, the forecaster said.

The weather in Brazil, however, has been moving the other way with rainfall this week and in the 11 to 15-day outlook likely to reduce stress on soybeans in southern parts of the country and in southern Paraguay, CWG said.

Prices also are moving this morning as investors square positions ahead of tomorrow's WASDE report from the U.S. Department of Agriculture.

A survey by Dow Jones shows traders are expecting USDA to raise its outlook on ending stockpiles for soybeans, corn, and wheat.

The USDA will release a separate report showing grain stockpiles on Dec. 1, and analysts are expecting a year-over-year decrease in inventories of both corn and beans, according to the Dow Jones poll.

Soybean futures for March delivery added 9 cents to $14.94 a bushel overnight on the Chicago Board of Trade. Soymeal was up $3.70 to $472.60 a short ton and soy oil rose 0.45¢ to 63.02 cents a pound.

Corn futures gained 2½ cents to $6.57 ½ a bushel.

Wheat for March delivery fell 1 cent to $7.30 a bushel while Kansas City futures dropped 2½ cents to $8.09 ¼ a bushel.

2. Biofuel Groups, NCGA Mostly Show Support For EPA Proposal

Leaders of groups including the National Corn Growers Association, the Renewable Fuels Association and the Advanced Biofuels Business Council said they were in favor of new standards for the Renewable Fuels Standard after the Environmental Protection Agency proposed increases in the amount of biofuel blends in gasoline.

The Environmental Protection Agency on Dec. 1 released proposed standards under the RFS raising the amount of renewable fuels blended, or "renewable volume obligations," by 2.05 billion gallons from 2022 to 2025.

The proposal would target the amount of renewable fuels blended at 20.82 billion gallons this year, 21.87 billion gallons next year, and 22.68 billion gallons in 2025, the EPA said last month. Cellulosic biofuel blends would rise from 720 million gallons to 2.13 billion gallons from 2023 to 2025, biomass-based diesel blends would increase from 2.82 billion to 2.95 billion gallons, and so-called advanced biofuel blends would increase from 5.82 billion to 7.43 billion gallons.

"We believe the proposed "set" rule establishes a firm foundation for the future of the RFS and creates a pathway for sustainable growth in the production and use of low-carbon fuels," Geoff Cooper, president of the Renewable Fuels Association, said in a statement yesterday. "Once finalized, the rule will further enhance our nation's energy security, reduce carbon emissions, and strengthen the rural economy."

Tom Haag, president of the National Corn Growers Association, said while the group supports the increases in RVOs, the EPA proposal doesn't go far enough.

He implored the EPA to work on "complementary policies" to increase blends.

Not everybody is happy with the proposed blends, however. The Clean Fuels Alliance America said it was frustrated with the proposed biomass blending requirements that would raise volumes from 720 million gallons to 2.13 billion gallons in 2025.

"The proposed rule significantly undercounts existing biomass-based diesel production and fails to provide growth for investments the industry has already made in additional capacity, including for sustainable aviation fuel," Clean Fuels Chief Executive Officer Donnell Rehagen said in testimony to the EPA.

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3. Extremely Dry Weather Remains Over Southern Plains

Red flag and high wind warnings have been issued for much of the southern Plains today as dry weather persists in the region, according to the National Weather Service.

Winds in parts of the Oklahoma and Texas panhandles will be sustained from 25 to 35 mph with gusts of up to 55 mph expected, the NWS said in a report early this morning.

Relative humidity will fall as low as 11%.

Winds in southwestern Kansas with gust up to 60 mph, the agency said.

In parts of Minnesota and Wisconsin, meanwhile, winter weather advisories will remain in effect until mid-morning as a wintry mix falls in the area.

"The greatest impacts from this wintry mix are occurring in the narrow band of mixed precipitation that is moving northeast across western and central Wisconsin," the NWS said