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3 Big Things Today, December 12, 2019

Soybeans Fall, Grains Little Changed Overnight; Ethanol Production Hits Five-Month High.

1. Soybeans Lower, Grains Mixed Amid Ongoing Trade Uncertainty

Soybeans were slightly lower in overnight trading, while grains were little changed amid continued uncertainty about a trade deal between the U.S. and China.

China has been silent this week on trade negotiations, while U.S. officials have said they’re still unsure whether they’ll raise tariffs on more than $150 billion worth of Chinese goods on December 15 as planned.

Reuters reported that President Donald Trump will meet with a team of top trade advisers including U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin today to talk about the potential tariff increase.

Analysts and other market-watchers at this point said it’s possible some sort of deal could be struck this week, but that’s become common refrain in the past 18 months. Traders and producers are looking for action from negotiators rather than more assurances that a trade deal is “close.”

Former acting deputy U.S. trade representative Wendy Cutler said in a speech at a conference in China that “the last mile is always the most difficult,” according to the South China Morning Post. Cutler is now the managing director of the Asia Society Policy Institute’s Washington office, the Post reported.

Soybean futures for January delivery lost 3½¢ to $8.90 a bushel overnight on the Chicago Board of Trade. Soy meal dropped 50¢ to $294.50 a short ton, while soybean oil rose 0.1¢ to 31.54¢ a pound.

Corn futures for March delivery gained ¾¢ to $3.72 a bushel.

Wheat for September delivery fell 2¢ to $5.17 a bushel, while Kansas City futures rose 1¢ to $4.31¾ a bushel.

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2. Ethanol Production Surges to Five-Month High, Stockpiles Highest Since November 1

Ethanol production jumped to the highest level in more than five months, while stockpiles also increased, according to the U.S. Energy Information Administration.

Output of the biofuel rose to 1.072 million barrels a day, on average, in the week that ended on December 6, the EIA said in a report. That’s up from an average of 1.066 million barrels a day a week earlier and the highest since June 28, government data show.

The weekly average has increased every week since September 20.

In the Midwest, by far the biggest-producing region, production rose to an average of 993,000 barrels a day from 983,000 barrels a week earlier.

Gulf Coast output rose to 23,000 barrels a day from 20,000 barrels and Rocky Mountain production increased to 15,000 barres a day from 14,000 the previous week, the EIA said.

East Coast production was unchanged at 27,000 barrels a day, on average, while West Coast output fell to 15,000 barrels a day from 17,000, the agency said.

Inventories, meanwhile, jumped to 21.815 million barrels in the seven days that ended on December 6.

That’s up from 20.639 million barrels the previous week and the highest since the week that ended on November 1, the EIA said in its report.

In other news, the USDA is scheduled to release its weekly export sales figures this morning. Analysts are expecting corn sales of 400,000 to 800,000 metric tons, soybean sales from 500,000 to 1.1 million tons, and wheat sales from 200,000 to 450,000 tons, according to research Allendale.

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3. Snowfall Expected to Continue in Northern Half of Wisconsin, Minnesota, North Dakota

Snowfall continues in the northern half of Wisconsin and some counties in eastern Minnesota this morning as a winter weather advisory is in effect for the area.

The snow is expected to taper off around noon or early afternoon, with total accumulations at around 6 inches, according to the National Weather Service.

Temperatures will be quite low with wind chills around -20˚F.

Winter weather also continues today in parts of North Dakota and western Minnesota where a dusting to a couple inches of snow are expected, the NWS said in a report early this morning.

The storm is expected to continue dropping snow into Friday evening with up to 3 inches expected, though some isolated areas could see more.

“There will be some blowing snow Friday afternoon and night as a cold front moves into the area, reducing visibility at times,” the agency said.

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