Uncover the Dynamics of Overnight Commodity Movements

Wheat Futures: A Closer Look at Overnight Decline

Wheat futures for March delivery lost 9 1/4¢ to $5.32 a bushel, while Kansas City futures fell 6 1/2¢ to $5.42 1/4 a bushel. This decline was influenced by the favorable weather conditions in Australia. Global wheat production in the 2024-2025 marketing year is now forecast by the U.S. Department of Agriculture at around 793 million metric tons, slightly up from 791.2 million a year earlier. However, Russian output is expected to plunge year over year due to unfavorable weather throughout the growing season. Production is now forecast at 81.5 million metric tons, down from 91.5 million tons last year.

The impact of these weather-related factors on wheat futures highlights the importance of global agricultural markets and the sensitivity of prices to weather events. It also shows how different regions and countries can be affected differently by weather patterns.

Ethanol Production: A Three-Week High Surge

Ethanol output jumped to a three-week high in the seven days that ended on Dec. 13, according to the Energy Information Administration. Production rose to an average of 1.103 million barrels a day last week, up from 1.078 million barrels the previous week and the highest output since Nov. 22. In the Midwest, the biggest producing region, production jumped to an average of 1.045 million barrels from 1.015 million the week prior, reaching the highest level in three weeks. West Coast production also increased to 10,000 barrels a day from 9,000 barrels the previous week.

Despite the increase in ethanol production, inventories declined narrowly, falling to 22.636 million barrels from 22.648 million a week earlier. This is the lowest level for stocks since Nov. 15. The steady production levels in different regions and the slight decline in inventories provide insights into the current state of the ethanol market.

Winter Storms: Impact on the Northern Midwest

Winter storm warnings and advisories have been issued along a wide stretch of the northern Midwest from western North Dakota east into Michigan. As much as 7 inches of snow are forecast for central Minnesota today and tonight, making travel extremely difficult. Strong winds will also cause blowing snow and potentially reduce visibilities, especially across western and southwestern Minnesota.

In Wisconsin, heavy snow with accumulations from 7 to 10 inches are expected starting tomorrow morning. Higher amounts are forecast closer to Lake Michigan where the lake will enhance the amount of snow falling. Lesser snowfall amounts will occur over north-central Wisconsin. These winter storms pose significant challenges to transportation and daily life in the affected regions.