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3 Big Things Today, November 14, 2019

Soybeans Slightly Lower, Grains Modestly Higher Overnight; U.S.-China Trade Prospects Take a Hit.

1. Soybeans Slightly Lower, Grains Higher in Overnight Trading

Soybeans were modestly lower overnight, while grains were a touch higher as investors weigh pessimism about a U.S.-China trade deal and dwindling prospects for the corn crop.

Prospects for a trade agreement between the nations – the world’s two largest economies – took a step back yesterday after President Donald Trump said in a speech that he would raise tariffs if a new deal isn’t agreed upon, while The Wall Street Journal reported negotiations have hit a snag due to disagreements over agriculture.

That caused consternation among not only commodities traders but also equities traders.

Corn prices, however, were underpinned by concerns about the U.S. crop.

The USDA last week said it now expects corn output at 13.661 billion bushels, down from its month-early outlook for 13.779 billion bushels.

Yield is now pegged at 167 bushels an acre vs. the previous forecast for 168.4 bushels an acre. Harvested area was unchanged month to month at 81.8 million acres.

The USDA said this week that 66% of the corn crop was collected as of Sunday, up from 52% the previous week but behind the prior five-year average of 85%.  Some 85% of soybeans were collected at the start of the week, up from 75% seven days earlier but still behind the average of 92%, the government said.

Soybean futures for January delivery fell ¾¢ to $9.14½ a bushel overnight on the Chicago Board of Trade. Soy meal lost 50¢ to $303.60 a short ton, while soybean oil added 0.03¢ to 30.56¢ a pound.

Corn futures for December delivery rose 1¼¢ to $3.76½ a bushel.

Wheat for September delivery gained 1¾¢ to $5.10¾ a bushel, while Kansas City futures added 2¾¢ to $4.27½ a bushel.

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2. Bad Day For Trade as Trump Says He Would Raise Tariffs, Talks Reportedly Stalled on Agriculture

It was a bad day for U.S.-China trade prospects yesterday as President Donald Trump threw a bit of cold water in a New York speech and The Wall Street Journal reported that negotiations have stalled over disagreements on agriculture.

Trump in a speech at the Economic Club of New York threatened again to raise tariffs on Chinese goods “very substantially” if a deal isn’t signed. He said he expects a trade agreement “soon” but didn’t give any details.

That furthered uncertainty about when – or if – a deal would be agreed upon.

A report from The Wall Street Journal, meanwhile, indicated that talks are stalled amid disagreements about agriculture.

Trump said last month that China had agreed to purchase $50 billion worth of agricultural products including soybeans and pork, but Beijing doesn’t want to commit to a certain level of purchases, the report said, citing people familiar with the matter.

At least a partial trade deal was announced in the middle of October. President Trump and President Xi Jinping were supposed to sign the agreement at the APEC meeting in Chile this month, but it was canceled by host country Chile after protests.

Even if a deal is agreed upon, finding a suitable place to sign it is proving difficult.

Gao Feng, a spokesman for the Chinese Ministry of Commerce, said today that the U.S. and China are still talking about removing some tariffs they’ve imposed on each other’s goods over the past 16 months, The Wall Street Journal reported.

Feng said last week that the sides had agreed to eliminate some tariffs, but Trump indicated he wasn’t yet willing to do that.

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3. Rain, Snow in Colorado, Kansas to Give Way to Dangerously Dry Weather

Rain and snow are expected in parts of eastern Colorado and western Kansas this morning, though temperatures are expected to remain above freezing, according to the National Weather Service.

No snow accumulation is expected, the NWS said in a report early this morning. The rain is expected to stop early this morning.

The precipitation will give way to dry weather, so dry, in fact, that hazardous fire conditions will move into the area, the agency said.

Much of the Midwest will be dry today, as weather maps look mostly quiet. Temperatures will be cold but not unseasonably so, considering it’s mid-November.

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