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3 Big Things Today, January 22

Soybeans, Corn Lower Overnight; Slowing Global Growth May Hurt Commodity Prices.

1. Soybeans, Corn Decline on U.S.-China Trade Concerns

Soybeans and corn were lower overnight on concerns about trade between the U.S. and China.

Talks between the countries earlier this month reportedly lacked progress on core demands from Washington including what the U.S. calls theft of intellectual property. China has denied that it’s stolen anything.

Negotiators from both sides met in Beijing two weeks ago, and top negotiator Liu He is scheduled to fly to Washington at the end of January to continue talks.

Presidents Donald Trump and Xi Jinping met in early December and hammered out a temporary trade deal under which the U.S. would hold off on raising its tariff rate on $200 billion worth of Chinese goods in exchange for Beijing promising to buy more American agricultural products.

The White House said a deal must be reached by March 1 or the tariff rate would jump to 25% from 10%. If that happens, it’s likely China would retaliate with further levies on U.S. products.

Soybeans for March delivery fell 2¼¢ to $9.14½ a bushel overnight on the Chicago Board of Trade. Soy meal lost $1.10 to $314 a short ton, and soy oil added 0.14¢ to 29.15¢ a pound.

Corn declined 2¢ to $3.79¾ a bushel overnight

Wheat for March delivery added 1¢ to $5.18¾ a bushel, while Kansas City futures rose 1¢ to $5.07 a bushel. 

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Today’s 3 Big Things from Successful Farming magazine is brought to you by Golden Harvest Seeds.

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2. Slowing Global Growth in 2019 Amid Trade Wars May Affect Commodity Prices, IMF Says

The International Monetary Fund, the 189-country global cooperative that oversees stability of global payments and enables countries to interact with each other, said global growth will slow in 2019 amid myriad economic issues, which could hurt commodity prices.

Global growth will come in at 3.5% this year and 3.6% this year, down from a prior projection of 3.7%, the IMF said in a report on Monday. The world economy in 2018 grew at a 3.7% pace, the agency said.

“The downward revisions are modest; however, we believe the risks to more significant downward corrections are rising,” the IMF said. “While financial markets in advanced economies appeared to be decoupled from trade tensions for much of 2018, the two have become intertwined more recently, tightening financial conditions and escalating the risks to global growth.”

In the U.S., the fund expects the economy to decelerate amid unwinding fiscal stimulus, while in Germany, production difficulties in the auto sector and weakening external demand will weigh on growth.

Inflations in both Japan and the eurozone are “significantly” below targets, the IMF said.

Growth across advanced economies as a whole is expected to slow to 2% in 2019 and 1.7% in 2020 after gaining 2.3% last year. In emerging economies, expansion is pegged this year at 4.5%, down 0.2 percentage point from an October outlook, before rebounding to 4.9% in 2020.

Of note for U.S. farmers, growth slowdown in China could be faster than expected due to the ongoing trade war between the world’s two largest economies. Continued tensions this year could lead to “abrupt sell-offs in financial and commodity market,” according to the IMF.

“An escalation of trade tensions and a worsening of financial conditions are key sources of risk to the outlook,” the agency said. “Higher trade uncertainty will further dampen investment and disrupt global supply chains. A more serious tightening of financial conditions is particularly costly given the high levels of private and public sector debt in countries.”

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Today’s 3 Big Things from Successful Farming magazine is brought to you by Golden Harvest Seeds.

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3. Large Winter Storm From Colorado Through Great Lakes to Bring More Snow, Ice to Corn Belt

A large winter storm continues to hammer much of the Corn Belt today, stretching from eastern Colorado all the way through the Great Lakes, according to the National Weather Service.

Parts of eastern Iowa, southern Wisconsin, and a few counties in northern Illinois are under a winter storm warning.

Another round of winter weather will bring accumulations of up to 8 inches of snow and a “light glazing” of ice, the NWS said in a report early this morning. Travel is expected to be very difficult.

“For areas that rise above freezing, pavement temperatures will be slow to respond because of the very cold conditions the past several days,” the weather service said.

“This increases the risk for light icing amounts from freezing rain. Temperatures will quickly fall through the 20s and into the 10s tonight, which will keep roads hazardous into Wednesday morning. Areas that change to all rain today will change to snow tonight as temperatures fall through the 20s. This could lead to a flash freeze situation on untreated surfaces.”

In much of northern Kansas and Nebraska, meanwhile, only about an inch of snow is expected, but it will be accompanied by about a tenth of an inch of freezing rain. Road conditions will become slippery throughout the day, the NWS said.

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