All News > Soybeans, Grains Higher Overnight; Ethanol Production Drops to Fresh Record Low

Soybeans, Grains Higher Overnight; Ethanol Production Drops to Fresh Record Low

Apr 23, 2020

1. SOYBEANS AND GRAINS HIGHER IN OVERNIGHT TRADING 

Soybeans and grains were higher in overnight trading on some fresh demand news and technical buying.

The USDA said in a report yesterday that China purchased 198,000 metric tons of soybeans for delivery in the marketing year that ends on August 31.

Investors also likely unwound their bearish positions and bought back contracts after corn prices fell to the lowest level since 2009 on Tuesday.

Demand concerns have dominated markets in recent weeks amid the spread of the COVID-19 virus. While overseas buyers have slowed purchases of some products, food demand has been strong, which may mean increased purchases of grains and oilseeds.

Ethanol demand, however, has plummeted as cars remain parked in the U.S. and people stay home, which also has weighed on prices.

Tyson Foods said it was shutting a pork plant in Iowa, the latest meatpacking facility to close in recent days.

Smithfield Foods last week closed its plant in Sioux Falls, South Dakota, amid an outbreak of the virus. The facility is one of the largest in the nation and represents 4% to 5% of all pork production in the U.S., the company said in a statement.

Soybean futures added 8¾¢ to $8.51¼ a bushel overnight on the Chicago Board of Trade, while soy meal gained $1.80 to $294.70 a short ton, and soy oil rose 0.55¢ to 26.54¢ a pound. 

Corn futures for May delivery rose 3½¢ to $3.28¼ a bushel overnight.

Wheat futures for May delivery gained 5¢ to $5.49 a bushel, and Kansas City futures added 1½¢ to $4.99¼ a bushel.

2. ETHANOL PRODUCTION FALLS TO FRESH RECORD LOW, WHILE INVENTORIES HIT HIGHEST EVER

Ethanol production fell to fresh record low last week, while stockpiles again reached the highest level ever, according to the Energy Information Administration.

Output of the biofuel dropped to an average of 563,000 barrels a day in the week through April 17, the EIA said in a report.

That’s down from 570,000 barrels per day and the lowest weekly average ever.

In the Midwest, by far the biggest producer of ethanol, output was reported at 530,000 barrels a day, on average, down from 540,000 barrels the previous week.

That comprised the entirety of the declines as Gulf Coast production was unchanged at 13,000 barrels a day, and Rocky Mountain output was unchanged at 5,000 barrels a day.

East Coast production rose to an average of 10,000 barrels a day from 9,000 a week earlier, and West Coast output was up to 5,000 barrels a day from 4,000 the previous week, the EIA said.

Stockpiles in the seven days through April 17 came in at 27.689 million barrels, up from 27.469 million a week earlier, and the highest total ever, government data show.

The Renewable Fuels Association said that 73 ethanol plants have shut amid slack demand for the biofuel that’s blended into gasoline due to COVID-19.

Ethanol sales could fall by more than $10 billion in the U.S. this year due to demand destruction, the RFA said in a report this week.

“Roughly half of the ethanol industry is shut down today, as fuel demand has collapsed in response to COVID-19, and it is clear we have a long and bumpy road to recovery ahead of us,” RFA Chief Executive Geoff Cooper said in a statement.

3. THUNDERSTORMS EXPECTED IN PARTS OF EASTERN KANSAS AND NORTHERN MISSOURI TOMORROW

A round of thunderstorms is expected in parts of extreme eastern Kansas and much of northern Missouri starting early tomorrow morning, according to the National Weather Service, which could delay corn and bean planting.

The rainfall is expected to continue throughout the day tomorrow, but no severe weather is expected, the NWS said in a report early this morning.

Farther south in the Southern Plains, isolated thunderstorms are expected in some counties late this afternoon into the early evening.

No severe weather is in the forecast but lightning is expected, the agency said.

David Ekstrom 



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