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3 Big Things Today, December 7

Soybeans Lower in Overnight Trading; South America Weather May Underpin Beans.

1. Soybeans Lower in Overnight Trading as Record Crop Still Looms

Soybean futures were lower in overnight trading as investors who’d driven up the price in the past two days booked profits and closed contracts.

The price had risen for two straight sessions on signs of strong demand for U.S. supplies, including a purchase of 426,000 metric tons by China announced on Monday, but record corn and bean production has kept a lid on any rallies.

The Department of Agriculture has pegged soybean production at 4.36 billion bushels on yields of 52.5 bushels an acre. Corn output is seen at 15.2 billion bushels on yields of 175.3 bushels an acre, according to the USDA.

Soybeans for January delivery fell 2½¢ to $10.45½ a bushel overnight on the Chicago Board of Trade. Soy meal futures for December delivery declined 60¢ to $321.30 a short ton, and soy oil lost 0.14¢ to 37.68¢ a pound. 

Corn futures declined 2¼¢ to $3.58¼ a bushel in Chicago.

Wheat futures for December delivery fell 3¢ to $4.03¾ a bushel in Chicago, while Kansas City futures declined 1¼¢ to $4.03¾ a bushel. 

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2. South America’s Dry Weather May Underpin Bean Prices

Soybean prices have been propped up by demand for U.S. supplies, but those who like to bet on higher prices may have a new reason to be bullish.

“The other issue for beans traders is South American weather,” said Tomm Pfitzenmaier, the president of Summit Commodity Brokerage in Des Moines, Iowa. “The rainfall in Argentina and southern Brazil is quite limited for the next 10 days, and there is some buying related to drought concerns.”

A La Niña weather event, characterized by drier weather in South America, likely may further keep rainfall away throughout the growing season, Pfitzenmaier said in a note to clients on Wednesday morning.

Commodity Weather Group said in a report this morning that showers will be limited in southern Brazil for the next two weeks, which could lead to dry spots for corn and soybeans. The chances for rain in Argentina is “very low” for the next 10 days, though there’s a chance of rain in the 11- to 15-day forecast, the forecaster said.

Still, some forecasters are saying the La Niña is limited or fading, “but as long as it’s not raining there, traders will be building in weather premium,” Pfitzenmaier said.

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3. Winter Weather Advisory Issued in North Dakota as Storm Heads East

A winter weather advisory is in effect for much of North Dakota on the heels of a strong winter storm that dumped as much as a foot of snow on the state.

Residents aren’t out of the woods yet, as strong winds and cold temperatures persist, according to the National Weather Service.

“Strong winds and very cold temperatures will also yield subzero wind chill readings and blowing snow,” the NWS said in a report on Wednesday. “Farther east, lake-effect snow warnings are in effect for portions of western New York. Snowfall amounts of 2 to 3 feet are possible late week into the weekend.”

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