3 Big Things Today, November 14
1. Soybeans Lower Overnight on Concern About China Fund
Soybeans were lower in overnight trading on Monday amid news reports that a Chinese hedge fund that invests in commodities was forced to cut positions.
China has been the biggest buyer of soybeans globally and has helped buoy export sales from the U.S. That, in turn, has kept prices for soybeans afloat. Reuters on Friday reported that a large fund had been forced to liquidate positions, citing traders, though its report didn’t say exactly why.
Export demand, in genera, has been unusually strong amid low prices not only for beans but also for corn and wheat.
Exporters in the current marketing year for soybeans that started on September 1 has sold 28% more than they did during the same time frame last year. Sales of corn have nearly doubled, while wheat purchases by overseas importers are up 31%, according to the Department of Agriculture.
This is all against a backdrop of what is expected to be record yield and production in the U.S. That’s kept a lid on prices while making supplies from the Corn Belt attractive to overseas buyers.
Soybeans for January delivery fell 7¢ to $9.79 a bushel on the Chicago Board of Trade. Soy meal futures for December delivery lost $1.30 to $306.50 a short ton, and soy oil declined 0.53¢ to 33.91¢ a pound.
Corn futures for December delivery lost 2½¢ to $3.37¾ a bushel in Chicago.
Wheat futures for December delivery dropped 5¢ to $3.98 a bushel in Chicago, while Kansas City futures fell 4¾¢ to $4.05½ a bushel.
2. Argentina, Brazil Weather Woes May Benefit Crop Prices
With the harvest wrapping up in the U.S., many growers, traders, and analysts are turning their attention to overseas competitors including those in South America.
The weather news is not good if you’re a grower in Argentina or Brazil, but their woes may be American producers’ gain, as they could prop up prices.
Flooding has reportedly been a problem in several areas in Argentina where abnormally high amounts of rainfall has hurt planting, forecasters have said. Commodity Weather Group said some fieldwork in southwestern Argentina was expected to slow over the weekend, and showers were expected in the 11- to 15-day forecast, again keeping farmers out of fields.
In Brazil, state crop agency Conab said last week that growers in the country would harvest 101.6 million to 103.5 million metric tons of soybeans. While those are lofty numbers, they’re still down from a prior outlook for 101.9 to 104 million tons.
The weather in Brazil hasn’t been as bad as it has in Argentina. Still, some interruptions in the harvest are expected this week and in the 11- to 15-day outlook due to rain, CWG said. Rain may, however, help crops in northern Brazil that are still growing.
It’s not just competitors to the south that are feeling weather pain. In Canada, a large snowstorm forecast for this week could prevent growers from collecting as much as 15% to 20% of their wheat, CWG said.
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3. Weather Mostly Quiet in U.S., Storm System Heads For Dakotas
The U.S. weather maps are mostly quiet early Monday with dense fog being a problem in much of the country.
The fog will reduce visibility in much of the Southern Plains this morning before clearing off later. In parts of northern Illinois, visibility in some areas will be almost zero, the National Weather Service said in a report on Monday.
A large storm is forecast for parts of the Dakotas later this week that could bring several inches of snow, the NWS said.
“A potent storm system is becoming increasingly likely across the region Thursday night through Friday,” the agency said. “This system has the potential to bring moderate amounts of snow accumulation. Strong winds appear to be likely, as well. Right now, the exact track of the storm and snow amounts are still in question.”
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