1. Grains and Soybeans Surge in Overnight Trading

Grains and soybeans were higher in overnight trading due to adverse weather in parts of the U.S. Midwest and Plains.

Dry weather is again prevalent in parts of the northern Plains where spring wheat, corn, and beans are growing.

Little or no rain has fallen in most of North Dakota, South Dakota, and northern Minnesota in the past week, according to the National Weather Service.

Northern Nebraska and parts of southwestern Iowa also haven’t seen rain in the past seven days, NWS maps show.

Farther south, however, western Kansas, much of Oklahoma, and pretty much the entirety of Texas has had at least six times the normal amount of precipitation in the past week.

The excessive rain may lead to quality issues for some hard-red winter wheat producers in the southern Plains.

Rainfall is expected to continue in parts of central Texas and return to eastern Oklahoma and southeastern Kansas starting on Sunday, said Donald Keeney, an agricultural meteorologist with Maxar.

The U.S. Drought Monitor, which was updated yesterday, shows continued stress in the northern Plains. About 18% of North Dakota, the biggest grower of spring wheat, was under an “exceptional drought,” the worst rating possible, according to the monitor.

Around 99% of the state is seeing some form of drought.

Conversely, there’s no drought in Kansas, the biggest grower of wheat in the U.S., according to the Drought Monitor.

Corn futures for July delivery jumped 12¼¢ to $6.74¼ a bushel overnight on the Chicago Board of Trade.

Wheat futures for July delivery rose 6¾¢ to $6.83 a bushel, while Kansas City futures gained 6¾¢ to $6.31 a bushel.

Soybean futures for July delivery surged 16¼¢ to $15.65½ a bushel overnight. Soymeal gained $1.50 to $393.10 a short ton, while soy oil rose 0.69¢ to 69.54¢ a pound.

2. Ethanol Production Increases to Highest in 14 Months

Ethanol output surged to the highest level in more than 14 months last week while inventories jumped, according to the Energy Information Administration.

Production of the biofuel increased to an average of 1.034 million barrels a day in the week that ended on May 28, the EIA said in a report.

That’s up from 1.011 million barrels a day the previous week and the highest since the seven days that ended on March 13, 2020.

In the Midwest, by far the biggest producing region, output increased to an average of 985,000 barrels a day, the agency said. That’s an increase from 965,000 the previous week.

East Coast production rose to an average of 11,000 barrels a day from 10,000 barrels a week earlier. Gulf Coast output improved to 18,000 barrels a day from 16,000 barrels the previous week, the EIA said.

Production in the Rocky Mountain and West Coast regions was unchanged at 10,000 barrels a day, on average, the agency said.

Ethanol stockpiles, meanwhile, increased to 19.588 million barrels in the week through May 28.

That’s up from 18.98 million barrels a week earlier and the highest level since the seven days that ended on April 30, the EIA said in its report.

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3. Red-Flag Warnings Issued For Parts of North Dakota and Minnesota

Red-flag warnings have been issued for parts of the northern Plains this morning as extremely dry weather continues in the area, according to the National Weather Service.

In eastern North Dakota and western Minnesota, winds are expected to be sustained from 15 to 25 mph with gusts of up to 35 mph, the NWS said in a report early this morning.

Relative humidity is forecast at around 17% with temperatures reaching the triple digits. The warning is in effect from noon until 9 p.m. local time.

In eastern Montana, temperatures will reach 101°F. today, and winds are expected from 5 to 15 mph with gusts of up to 30 mph.

Humidity is pegged at about 17%, creating tinderbox-like conditions, the NWS said.

Dry conditions also are expected to prevail in much of northern Illinois heading into the weekend.

“Hot, dry, and breezy conditions this afternoon amidst the ongoing moderate to severe drought across northern Illinois will result in an elevated risk of more rapid fire spread,” the agency said.