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3 Big Things Today, January 12, 2023

Soybeans, Grains Rise Overnight; Weekly Ethanol Production Surges

1. Soybeans, Grains Higher in Overnight Trading

Soybeans and grains were higher in overnight trading on adverse weather globally and as investors await today's World Agricultural Supply and Demand Estimates (WASDE) report from the U.S. Department of Agriculture.

Precipitation expected this week in some parts of Argentina will be insufficient to boost crop prospects, said Don Keeney, an agricultural meteorologist with Maxar.

"Rains (yesterday and today) will be too light to improve moisture, and dryness will quickly expand again late (this) week through next week," he said in a note to clients.

Argentina's Rosario Grain Exchange said yesterday that it now expects soybean production in the South American country of 37 million metric tons, down from the previous outlook for 49 million tons. Corn output is now seen at 45 million metric tons, down from 55 million tons.

Dry weather is expected Friday through Sunday, Keeney said in his report.

Investors also are awaiting today's WASDE report from USDA.

The government likely will reduce its estimate for corn stocks to 1.302 billion bushels from the previous forecast of 1.257 billion bushels, according to a poll by Dow Jones. Soybean inventories will probably be pegged at 236 million bushels, up from the December outlook for 220 million bushels, the survey said.

Traders also will be keeping an eye on global inventories and U.S. soybean and corn production in today's report.

Soybean futures for March delivery added 10¼ cents to $15.03 ¼ a bushel overnight on the Chicago Board of Trade. Soymeal was up $4.60 to $479.20 a short ton and soy oil rose 0.49¢ to 62.6¢ a pound.

Corn futures gained 3¼ cents to $6.59 ¼ a bushel.

Wheat for March delivery added 1½ cents to $7.41 ½ a bushel while Kansas City futures rose 4 cents to $8.26 ¼ a bushel.

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2. Ethanol Production Rebounds From Two-Year Low

Ethanol output last week rebounded from an over two-year low while inventories plunged to the lowest level in over a month, according to data from the Energy Information Administration.

Production of the biofuel increased to an average of 943,000 barrels per day in the week that ended on Jan. 6, the EIA said in a report.

That's up from 844,000 barrels a day the previous week, which was the lowest output level since June 2020.

In the Midwest, by far the biggest producing region, production rose to 895,000 barrels per day, on average, from 794,000 barrels the previous week.

East Coast output was up to 10,000 barrels a day from 9,000 a week earlier, and Rocky Mountain production was up to 12,000 barrels per day from 11,000, the agency said.

Gulf Coast production, meanwhile, fell to an average of 22,000 barrels per day from 24,000 barrels, and West Coast output dropped to 4,000 barrels a day from 6,000 the previous week, the government said.

Ethanol stockpiles dropped to 23.8 million barrels in the seven days that ended on Jan. 6.

That's down from 24.444 million barrels a week earlier, marking the lowest level since Dec. 2, the EIA said in its report.


3. Strong Winds Expected in Parts of Southern Kansas, Northern Oklahoma

Wind advisories have been issued for parts of southern Kansas and northern Oklahoma this morning, according to the National Weather Service.

Northwest winds are forecast from 15 to 25 mph with gusts of up to 40 mph, the NWS said in a report early this morning. The winds will diminish throughout the morning.

A wintry mix is falling in the area with ran and snow in some areas. Only a trace of slushy snow is forecast to accumulate, the agency said.

Further east in parts of central and southeastern Illinois, isolated thunderstorms are possible this morning, though the risk of severe weather is low.

Still, some heavy ran may fall in the area, the NWS said.

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