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3 Big Things Today, November 3

Corn, Beans Up in Overnight Trading; Fed Leaves Interest Rates Unchanged Ahead of Election.

1. Corn, Soybeans Higher as Demand For U.S. Supplies Persists

Corn and soybeans were modestly higher in overnight trading amid continued strong export demand for U.S. inventories.

Exporters yesterday said they sold 132,000 metric tons of soybeans to China for delivery in the 2016-2017 marketing year, according to the Department of Agriculture. On Tuesday, exporters sold 212,344 metric tons of corn to Mexico for delivery in the year that started on September 1, the USDA said.

Sales of corn since the start of the marketing year are up 85% from the same time frame a year earlier, while soybean sales have risen 24%, according to the government. Wheat sales are up 26% year over year, USDA data show.

Corn futures for December delivery rose 1½¢ to $3.47¾ a bushel on the Chicago Board of Trade.

Soybeans for January delivery gained 2½¢ to $9.89 a bushel in Chicago. Soy meal futures for December delivery added $1.60 to $308.30 a short ton, and soy oil lost 0.06¢ to 34.92¢ a pound.  

Wheat futures for December delivery fell 1¼¢ to $4.16½ a bushel in Chicago, while Kansas City futures declined ½¢ to $4.15 a bushel. 

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2. Federal Reserve Leaves Interest Rates Unchanged Ahead of Election

Interest rates remain unchanged for at least another month despite strengthening economic indicators, keeping borrowing costs for large purchases low.

The Federal Reserve’s Federal Open Markets Committee (FOMC) decided to leave its federal funds rate at a 0.25% to 0.5% rate for at least another month. The labor market has improved and economic activity growth has accelerated from the first half of the year, but the Fed stood fast on the current rate.

Wages have improved since the start of the year, but still remain low, the Fed said.  

“Although the unemployment rate is little changed in recent months, job gains have been solid,” the Fed said in a statement on Wednesday. “Household spending has been rising moderately, but business-fixed investment has remained soft.”

A change at the Fed’s November meeting wasn’t anticipated since it was held less than a week before the November 8 election in the U.S. A hike in December, however, looks likely. The CME Group’s FedWatch Tool said there’s a 71.5% chance that the FOMC will raise rates at its meeting next month.

The committee, of course, said it will continue to monitor economic conditions between now and then to ensure a rate increase is warranted.

“Committee judges that the case for an increase in the federal funds rate has continued to strengthen but decided, for the time being, to wait for some further evidence of continued progress toward its objectives,” the FOMC said. “The stance of monetary policy remains accommodative, thereby, supporting further improvement in labor market conditions and a return to 2% inflation.”

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3. Rain May Produce Flooding in Southern Plains; Midwest Looks Mostly Dry

Rain is expected in parts of the Southern High Plains this afternoon and evening into tomorrow, the National Weather Service said in a report on Thursday morning.

“A slow-moving, low pressure system is expected to bring increasing chances for rain over much of New Mexico and western Texas Thursday and Friday,” the NWS said. “A period of heavy rainfall may be possible, which could produce flooding of low-lying and poor-drainage areas.”

Little rain is expected in much of rest of the Plains and Midwest today, according to the service. Other than some fog, it looks like dry weather will dominate much of the country today.

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