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3 Big Things Today, September 25

Soybeans Slightly Lower Overnight; U.S.-China Trade War Has Topsy-Turvy Week.

1. Soybeans Lower Overnight on Trade Concerns

Soybeans were slightly lower in overnight trading on concerns about trade while corn was little changed.

President Trump yesterday took a hard-line stance against China, saying the U.S. would take nothing less than a great deal if it were to sign a trade agreement with the Asian country.

Still, China reportedly bought 600,000 metric tons of soybeans from U.S. supplies earlier this week, according to media reports, which cited people familiar with the issue. After some initial optimism, it looks like traders are taking a wait-and-see approach, as they have been for more than a year.

Producers and analysts, however, are keeping an eye on the weather as there’s a “limited frost threat” to the northwestern Corn Belt next week, according to the Commodity Weather Group.

With crops being planted so late, an early or even an on-time frost is a concern.

The spring wheat harvest also has been delayed as more than six times the normal amount of rain has fallen  in the past 30 days in much of the Northern Plains. About 87% of the crop, however, was in the bin at the start of this week, which is behind the prior five-year average of 97% for this time of year.

The U.S. corn harvest, meanwhile, was 7% finished vs. the prior five-year average of 11%, the agency said. Only 29% of the crop was mature at the start of the week compared with the normal 57%.

Soybean maturity also remains well behind the normal pace with only 34% dropping leaves against the average of 59% for this time of year, the USDA said.

Soybean futures for November delivery fell 2½¢ to $8.91¾ a bushel overnight on the Chicago Board of Trade. Soy meal lost 80¢ to $298.70 a short ton, while soybean oil fell 0.14¢ to 29.19¢ a pound.

Corn futures for December delivery was unchanged at $3.74¾ a bushel.

Wheat for September delivery fell 3¼¢ to $4.78½ a bushel overnight, while Kansas City futures lost 3¢ to $4.02 a bushel.


2. Topsy-Turvy Week on Trade Front Leaves Market-Watchers Wondering What’s Next

It’s been a bit of an up-and-down week in terms of the ongoing trade war between the U.S. and China as there was good news, then bad news, then more good news, and now more bad news.

It started late last week when it was announced Chinese officials would visit U.S. farms, which caused corn and soybean prices to move higher.

On Friday, however, visits to Montana and Nebraska, at least, were canceled for unknown reasons. Markets tanked. Turns out, however, the U.S. asked for those visits to be delayed due to a timing issue, Treasury Secretary Steven Mnuchin had said during a press conference Monday.

Also on Monday, media reported that China purchased about 600,000 metric tons of soybeans from U.S. suppliers, also a good sign that last week’s low-level talks in Washington were fruitful.  

Finally, the bad news for the markets came yesterday when President Donald Trump in a speech to the United Nations lashed out at Beijing, saying he wouldn’t accept a bad trade deal.

“Not only has China declined to adopt promised reforms, it has embraced an economic model dependent on massive market barriers, heavy state subsidies, currency manipulation, product dumping, forced technology transfers, and the theft of intellectual property and also trade secrets on a grand scale,” he said.

China’s Foreign Minister Wang Yi reportedly said there will be “endless trouble” if the U.S. and China don’t continue trade talks.

Mnuchin and U.S. Trade Representative Robert Lighthizer are scheduled to meet with their Chinese counterparts for high-level negotiations next month.


3. Eastern Iowa, Northern Illinois Rain May Cause More Flooding in Region

Eastern Iowa and northern Illinois likely will see rainfall starting on Friday with some severe weather expected in the region, according to the National Weather Service.

The Mississippi River along the Iowa-Illinois border is already flooding in some places, and the expected precipitation heading into the weekend could exacerbate that and cause smaller rivers and streams to overflow their banks, the NWS said in a report early this morning.

“A near daily chance for thunderstorms will continue Saturday into the middle of next week,” the agency said. “It’s too early to determine the severe weather potential during this time period. Heavy rain will remain possible.”

CWG said in a forecast that it expects from ½ to 1½ inches of rain in the next five days in the Midwest. Up to 4 inches of rain are possible, the forecaster said.

That could delay the harvest, putting plants that remain in the ground at risk should freezing weather make its way to the Corn Belt.

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