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3 Big Things Today, November 18, 2019
1. Soybeans, Grains Little Changes on Trade Uncertainty
Soybeans and grains were little changed in overnight trading, as the market looks for direction amid the ongoing trade war with China.
The U.S. and China – the world’s two largest economies – have been embroiled in an almost 18-month spat that has led to hundreds of billions of dollars in tariffs.
Both sides have said recently that at least a “partial” trade deal has been hammered out, but that doesn’t seem to be the case as negotiations continue with no end in sight.
President Donald Trump said in a tweet Sunday that U.S. producers will receive another round of government aid before Thanksgiving Day next week.
Trump and his counterpart, Xi Jinping, were supposed to sign a so-called Phase 1 trade agreement this month, but those plans fell through due to the cancelation of the APEC conference in Chile, and so far a new site hasn’t been announced.
China has been reluctant to promise it would import a set amount of agricultural products after Trump said last month Beijing would purchase $50 billion worth of goods. Trump said that he would raise tariffs if a new deal isn’t agreed upon.
Soybean futures for January delivery fell ¼¢ to $9.18 a bushel overnight on the Chicago Board of Trade. Soy meal rose 20¢ to $307.30 a short ton, while soybean oil added 0.04¢ to 30.47¢ a pound.
Corn futures for December delivery rose ¼¢ to $3.71½ a bushel.
Wheat for September delivery dropped 1¼¢ to $5.01½ a bushel, while Kansas City futures fell ¼¢ to $4.25½ a bushel.
2. Money Managers Raise Bearish Bets in Corn, Reduce Net-Long Positions in Beans
Money managers raised their net-short positions, or bets on lower prices, in corn to the highest level in six weeks while cutting their bullish bets on soybeans.
Large hedge funds and other speculators held 120,536 net-short positions corn futures as of November 12, up from 109,720 futures contracts a week earlier, according to the Commodity Futures Trading Commission.
That’s the biggest such position since the week that ended on October 1, the CFTC said in a report.
Speculators held 25,460 net-long positions, or bets on higher prices, in soybean futures last week, down from 53,503 contracts a week earlier. That’s the smallest bullish stance on soybeans since October 8, government data show.
Investors have been more bearish on corn and less bullish on beans in recent weeks amid harvest pressure and as the ongoing trade war with China continues. Both sides have said a deal is within reach, but nothing definitive has been agreed upon.
Money managers, however, increased their net-long positions, albeit only slightly, in soft red winter wheat futures contracts last week, bumping them to 3,720 from 2,333, the CFTC said.
Investors were less bearish on hard red winter wheat, lowering their net-short positions to 23,844 futures contracts as of November 12. That’s down from 34,917 contracts a week earlier and the smallest such position in three weeks.
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. Light Snow May Fall in Parts of Iowa, Wisconsin; Freezing Rain Forecast in Indiana
Light snow is in the forecast for tonight in parts of northeast Iowa and western Wisconsin, according to the National Weather Service.
Accumulations will be small – only about 1 inch, the NWS said in a report early this morning.
In central Indiana, meanwhile, some freezing rain is expected to fall intermittently tonight, which could cause roads to become slick.
“A short wave could bring a chance of precipitation to the area,” the NWS said. “This precipitation may include snow and freezing rain mixing in with rain for the northern half of the forecast area. This could cause a few slick spots on roads.”
In the Southern Plains, strong winds of up to 35 mph along with low humidity has increased the risk of wildfires today. The risk will be highest in the early afternoon, the agency said.