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3 Big Things Today, December 29

Soybeans, Corn Higher in Overnight Trading; Dollar’s Gain Not Good News For Farmers.

1. Soybeans, Grains Higher Amid Strong Demand, Short-Seller Buying

Soybeans, corn, and wheat were all in the green amid strong demand for U.S. supplies and as investors who were short the market, or bet on lower prices, buy back contracts before the end of the year.

Demand for soybeans and corn has been strong since the start of the marketing year. Sales of beans since September 1 are up 27% vs. the same time frame in 2015, while corn sales have jumped 76% year over year, according to the USDA.

Wheat sales since the start of the marketing year on June 1 are up 32% compared with a year earlier, USDA data show.

With only two trading sessions to go before the end of the year, it’s likely some investors with short positions, or bets on lower prices, are liquidating their positions and buying back contracts, giving the price a small bump.

Soybean futures for March delivery rose 5¢ to $10.21½ a bushel overnight on the Chicago Board of Trade. Soy meal futures added $2.50 to $322.80 a short ton, and soy oil fell 0.01¢ to 35.11¢ a pound.

Corn futures added 2¢ to $3.50¼ a bushel in Chicago.

Wheat futures for March delivery gained 3¼¢ to $4.04¾ a bushel on the CBOT, and Kansas City futures rose 2¾¢ to $4.12¼ a bushel.  

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2. Dollar’s Retesting Highest Level in a Decade May Curb Demand For U.S. Supplies

The dollar is at it again.

After rising to the highest in more than a decade last week, the U.S. dollar again retested those highs this week, and that’s not good news for growers.

A strong greenback theoretically reduces demand for U.S. goods including agricultural products by curbing purchasing power of overseas buyers.

The dollar has strengthened throughout 2016 along with the economy. Global economic weakness has dragged down competing currencies globally, as well, boosting the value of the dollar. The fear is that overseas buyers who’ve already purchased a lot of corn, beans, and wheat from the U.S. since the start of their respective marketing years will begin to slow purchases.

That’s not far fetched considering Argentina and Brazil likely will have soybeans available starting in February or March and corn ready for shipment in May or June, analysts have said. That’s about the time countries, including China, that generally lead buyers turn to South America for new crops.

Still, the dollar’s rally may be running out of steam. The greenback is down sharply this morning, and some analysts have said the run-up in value can’t be sustained.

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3. Strong Winds Create Winter Fire Risk in Parts of Iowa, Missouri

Strong winds have led the National Weather Service to issue a warning that wildfires may spread rapidly in parts of Iowa and Missouri today.

Winds will move from 30 mph to 40 mph throughout the day in parts of both states. That, along with extremely low relative humidity, means the risk of a wildfire spreading is quite high, the NWS said in a report on Thursday morning.

“Winds will pick up through the morning to around 30 mph or more sustained with the potential for a few gusts of 40 mph or greater,” the NWS said. “Winds will subside by sunset and continue to trail off overnight as high pressure riding builds.”

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