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3 Big Things Today, January 30

Soybeans, Grains Rise Overnight; U.S. May Benefit From South American Weather Woes.

1. Soybeans, Grains Slightly Higher Ahead of Trade Talks

Soybeans and grains were slightly higher as trade talks begin with China today.

Vice Premier Liu He and a delegation of Chinese trade officials are in Washington today and tomorrow for talks with U.S. officials including Trade Representative Robert Lighthizer.

The sides likely will discuss ongoing trade issues regarding intellectual property, the U.S. trade deficit to China, and agriculture during the two-day talks.

Commerce Secretary Wilbur Ross has said he doesn’t expect an agreement this week as the sides are still too far apart on several issues. Treasury Secretary Steven Mnuchin, meanwhile, told Fox Business that he expects “significant progress” on some issues including technology transfer this week.

The U.S. and China have a temporary deal agreed upon by President Donald Trump and President Xi Jinping in early December under which Washington has delayed raising tariff rates to 25% from 10% and Beijing agreed to purchase more agricultural products and curb levies on American automobiles.

Soybeans for March delivery rose 2¢ to $9.21 a bushel overnight on the Chicago Board of Trade. Soy meal gained 70¢ to $312.50 a short ton, and soy oil declined 0.09¢ to 30.20¢ a pound.

Corn rose 1¾¢ to $3.79 a bushel overnight

Wheat for March delivery added 1¾¢ to $5.15 a bushel, while Kansas City futures gained 3¢ to $5.03¼ a bushel.

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2. South American Soybean Production Woes May Lead to Increased Demand For U.S. Supplies

South American weather woes likely will mean more demand for U.S. soybeans, analyst Oil World said in a report yesterday.

The Hamburg-based company said it expects exportable South American supplies to decline in 2019, and the U.S. should be the beneficiary, according to media reports.

Hot, dry weather has curbed production in many growing areas in Brazil. About a fourth of the soybean and corn crops, a third of cotton, half of sugar, and two thirds of coffee will be negatively affected by the drought, Commodity Weather Group said.

In Argentina, meanwhile, excessive rain has curbed yields. Heavy rain is forecast for some growing areas in central Argentina in the next three days, though a “more limited” pattern is expected, which will ease excess moisture, CWG said.

South American output may be reduced by 6 million to 8 million metric tons, Oil World said, according to reports. Brazil’s soybean crop is forecast from 113 million to 117 million metric tons. The USDA last month pegged the country’s crop at 122 million metric tons.

Argentina’s crop could fall as low as 49 million metric tons, Oil World said. The USDA in December said it expected output at 55.5 million tons.

While the U.S. will benefit from reduced production in South America, some of the gains will be neutralized by expectations for a downward revision in imports from China, the analyst said.

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3. Wind Chill Warnings Abound as Lowest Readings Expected to Hit -65˚F.

It may be a good time to binge-watch some Netflix or catch up on your correspondence as the Polar Vortex settles in over the Upper Midwest, bringing extremely low temperatures and deadly wind chills.

A wind chill warning is in effect from North Dakota south into Missouri and northeast into New York state, according to the National Weather Service.

Wind chills in parts of Minnesota, Iowa, and Wisconsin fell as low as -60˚F. overnight, the NWS said in a report early this morning. Strong northwest winds are causing blowing and drifting snow, making travel difficult.

The wind chill warning in the area is in effect until Thursday morning.  

“Take this cold seriously as it could be life-threatening,” the agency said.

It’s not much better in northern Indiana, southern Michigan, and Ohio, where wind chills are forecast as low as -50˚F., the NWS said.

The worst of the cold, however, is likely going to be in North Dakota and Minnesota, where wind chills will fall as low as -65˚F. Frostbite can form in less than five minutes, and hypothermia or even death is possible from exposure, the agency said.

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