3 Big Things Today, February 6
1. Soybeans, Grains Barely Move After State of the Union
Soybeans and grains were barely lower in overnight trading as the State of the Union address by President Donald Trump last night didn’t provide much outlook on trade.
In his speech, the president said he has “great respect for President Xi (Jinping of China)” and that the countries – the world’s two largest economies – are working on a trade deal. Any agreement must include “structural” change that will end what he called unfair trade practices, reduce the trade deficit, and protect American jobs.
Trump reiterated what he’s already said, while analysts were looking for more concrete plans from the president.
On the positive side, however, U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are scheduled to head to Beijing to continue talks later this month, potentially ahead of a meeting between Trump and Xi when a final agreement would be signed.
Talks last week that lasted two days in Washington, by all accounts, went well with both U.S. and Chinese officials expressing optimism about the possibility of coming to an agreement on trade.
Soybeans for March delivery fell ¾¢ to $9.19½ a bushel overnight on the Chicago Board of Trade. Soy meal gained 10¢ to $309.60 a short ton, and soy oil lost 0.03¢ to 30.35¢ a pound.
Corn lost ¾¢ to $3.80 a bushel overnight
Wheat for March delivery rose ¼¢ to $5.27½ a bushel, while Kansas City futures fell ¾¢ to $5.10½ a bushel.
2. Money Managers More Bearish Across The Board in Week Through December 31, CFTC Says
Money managers cut their net-long positions, or bets on higher prices, in corn by almost half in the week that ended on December 31 while increasing their bearish bets on soybeans.
Speculators were net long by 49,188 corn futures contracts at the end of last year, down from 90,880 contracts the prior week, according to the Commodity Futures Trading Commission.
That was the smallest such position in four weeks, said the CFTC, which is now playing catch-up after the longest partial government shutdown in history that lasted 35 days.
The agency said it will release two Commitment of Traders Reports each week until caught up – one on Tuesday and one on Friday.
Investors held 14,295 net-short positions, or bets on lower prices, in soybean futures in the seven days through December 31. That’s up from 3,239 futures contracts the previous week and the biggest net-short position since November 27, according to the CFTC.
In wheat, money managers held 4,656 net-short positions in hard red winter contracts, up from 142 futures contracts the previous week. That’s the biggest bear position in hard red winter since November 27, the agency said.
Speculators were net short by 34,302 soft red winter wheat futures contracts during the week, up from 18,325 contracts seven days earlier and also the biggest such position since November 27, according to the government.
The weekly Commitment of Traders Report from the Commodity Futures Trading Commission shows trader positions in futures markets.
The report provides positions held by commercial traders, or those using futures to hedge their physical assets; noncommercial traders, or money managers (also called large speculators); and nonreportables, or small speculators.
A net-long position indicates more traders are betting on higher prices, while a net-short position means more are betting futures will decline.
3. Large Storm Likely to Impact Much of Central U.S. as Freezing Rain, Snow Forecast
A very large storm stretching from Utah to the northeastern U.S. and from the Canadian border to southern Oklahoma is expected to bring snow, ice, and strong winds, according to the National Weather Service.
A winter weather advisory is in effect for much of the region.
In southwestern Kansas, freezing drizzle is expected today and tonight with ice accumulations of a few hundredths of an inch, the NWS said in a report early this morning. Areas of dense freezing fog will make roads slick and reduce visibility.
The drizzle will turn to snow later today, which will further reduce visibility as strong winds are likely as well, the agency said.
In eastern Nebraska and western Iowa, a mix of freezing drizzle and sleet is expected to develop before changing to snow. The snow will last into Thursday mornings with an inch of accumulation expected. Wind gusts, however, will be around 40 mph.
In northeastern Iowa, southwestern Wisconsin, and northern Illinois, a mix of snow, sleet and freezing rain is expected this afternoon.
“This wintry mix will then spread across the remainder of the area during the early evening, transitioning to mainly freezing rain tonight and then all snow on Thursday,” the NWS said. “This will result in slick travel from the evening commute into Thursday.”