In the world of commodities trading, overnight activities often hold significant implications. Recent reports suggest that wheat futures saw a notable increase in overnight trading. This surge was driven by the concerning condition of a sizable percentage of Russia's crops. As stated by Andrey Sisov, the managing director of SovEcon and author of The Sizov Report, about 37% of Russian grain, primarily wheat, is in poor condition. This marks the highest level in at least a decade, compared to just 4% at the same time last year.

Unraveling the Dynamics of Commodity Markets

Wheat Futures: Overnight Trading Insights

The rise in wheat futures overnight on the Chicago Board of Trade is a significant development. March delivery futures rose 4 1/4¢ to $5.52 1/2 a bushel. This increase is not only influenced by the poor condition of Russian wheat but also by adverse weather in Australia, the world's fourth-largest wheat exporter. Excessive rain in major growing areas has led to quality issues for the country's bumper crop. Despite this, the U.S. Department of Agriculture forecasts Australian production in the 2024-2025 marketing year to increase from 26 million tons to 32 million metric tons. Exports are also expected to rise from 20 million tons in the 2023-2024 marketing year to 25 million metric tons.In addition to the Chicago Board of Trade, Kansas City futures also saw an upward trend. March delivery futures rose 4 1/2¢ to $5.47 a bushel. This shows the widespread impact of these market factors on different trading locations.

Ethanol Production: From Record High to Decline

The data from the Energy Information Administration reveals a notable shift in ethanol production. After reaching a record high, output fell in the seven days ending on Nov. 29. Production declined to an average of 1.073 million barrels a day last week, down from a record 1.119 million the previous week and the lowest level since Oct. 11. In the Midwest, output averaged 1.014 million barrels a day, showing a decrease from 1.048 million the week prior and reaching the lowest production since Oct. 18. Gulf Coast production plunged from 34,000 barrels a day to 22,000 barrels a day. East Coast output remained steady at 12,000 barrels a day for a third straight week, and Rocky Mountain production was unchanged at 15,000 barrels a day for the fifth consecutive week. Only the West Coast saw a gain, with output rising to an average of 10,000 barrels a day from 9,000 barrels a week earlier. Ethanol inventories also increased during this period, totaling 23.003 million barrels, up from 22.869 million the previous week and reaching the highest level since Sept. 27.

Heavy Snow in Western Michigan: A Weather Alert

The National Weather Service has issued winter storm warnings for eastern Michigan due to heavy snow and intense winds that are curbing visibility. Heavy snow is expected to continue throughout the day and well into tonight, with forecasts of up to 8 inches of snow in the area. Winds will gust up to 45 mph, causing visibilities to drop below a quarter mile due to falling and blowing snow. This strong wind and the weight of snow on tree limbs may lead to downed power lines and sporadic power outages. In central Indiana, winds will be sustained at 20 to 30 mph with gusts up to 55 mph expected. Wind chills are forecast to plummet to as low as minus-5 degrees Fahrenheit overnight.