3 Big Things Today, January 6, 2023

1. Soybean, Grain Futures Higher in Overnight Trading

Soybean and corn futures jumped in overnight trading as more dry weather is expected in parts of Argentina, where crops have been suffering from a severe lack of moisture this growing season.

It's been dry in the South American country this week with no relief in sight for the weekend, said Don Keeney, an agricultural meteorologist with Maxar.

"Dry and hot conditions through early next week will allow moisture shortages and stress to continue," he said in a report. The area may see a "slight improvement" next week, Keeney said.

Wheat futures also rose in overnight trading amid ongoing drought in much of the U.S. southern Plains where hard-red winter varieties are overwintering.

Little or no rain has fallen in much of southwestern Kansas or the Oklahoma and Texas panhandles in the past two weeks, data from the National Weather Service's precipitation page shows.

Almost all of Oklahoma and the western three-fourths of Texas haven't seen meaningful precipitation in at least the past 14 days, the NWS said.

About 84.5% of Kansas, the biggest producer of hard-red winter wheat, is suffering from drought conditions, little changed from 85.6% a week earlier, according to the U.S. Drought Monitor, which was updated yesterday.

In Oklahoma, almost 90% of the state was seeing drought, unchanged week-to-week, the monitor said.

Capping gains, however, are forecasts for improvements in soil moisture in Nebraska due to snowfall in the state.

"Snow will improve moisture in Nebraska when it melts," Keeney said. "Dryness continues in central and southwestern areas (of the southern Plains); winterkill threats will remain low."

Soybean futures for March delivery rose 10¾¢ to $14.81 ½ a bushel overnight on the Chicago Board of Trade. Soymeal was up $4.80 to $469.70 a short ton and soy oil added 0.22¢ to 62.64¢ a pound.

Corn futures gained 5¢ to $6.57 ¾ a bushel.

Wheat rose 6¢ to $7.52 ¾ a bushel while Kansas City futures gained 4¹⁄₄ ¢ to $8.44 a bushel.

2. Ethanol Production Falls to Lowest Since June 2020

Ethanol output dropped to the lowest level in more than two years while inventories were down slightly last week, according to the Energy Information Administration.

Production fell to an average of 844,000 barrels per day in the last week of 2022, the EIA said in a report that was delayed a day due to the New Year's holiday.

That's down from 963,000 barrels a day, on average, the previous week and the lowest level since the week that ended on June 12, 2020.

Losses were broad-based across all regions but one in the U.S.

In the Midwest, by far the biggest producing region, output plunged to an average of 794,000 barrels per day from 906,000 barrels a week earlier. That's the lowest since the seven days that ended on May 29, 2020.

East Coast production was down to 9,000 barrels per day from 12,000 barrels a week earlier, and West Coast output fell to 6,000 barrels a day from 9,000 barrels, the EIA said.

Rocky Mountain output declined to 11,000 barrels a day, on average, from 14,000 barrels the previous week.

The only gainer for the week was the Gulf Coast region where producers averaged 24,0000 barrels a day, up from 22,000 barrels a week prior, the agency said.

Ethanol inventories, meanwhile, were down slightly to 24.444 million barrels from 24.636 million barrels a week earlier, the EIA said in its report.

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3. Snow Expected in Parts of Illinois and Indiana Friday

Light snow and freezing drizzle are expected in parts of northern Illinois and Indiana today, according to the National Weather Service.

Some slick spots on roads and other surfaces are forecast as temperatures will be at or just below freezing, the NWS said in a report early this morning.

In the southern Plains, a warming trend is expected today, the agency said. That, along with "breezy winds," may result in enhanced fire weather in much of southwestern Kansas.

In the Texas panhandle, strong winds and warmer-than-normal temperatures will lead to elevated fire risks this afternoon, the NWS said.

Winds will be sustained from 20 to 25 mph with gusts of up to 35 mph forecast. Relative humidity in the area is expected to drop as low as 12%.