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3 Big Things, November 26, 2019
1. Investors Position Ahead of Thanksgiving Holiday
In overnight trading, the Dec. corn futures are 1¢ lower at $3.69. March futures are 1¼¢ lower at $3.79.
Jan. soybean futures are ¼¢ lower at $8.92¼. March. soybean futures are ¼¢ lower at $9.06¾.
Dec. wheat futures are 4¾¢ lower at $5.28¼.
In the outside markets, the U.S. dollar is lower, and the Dow Jones Industrials are seen higher.
Al Kluis, Kluis Advisors, says that the bullish news should provide support this week.
“The USDA Crop progress report yesterday showed over 10 million acres of corn still out in the field in North and South Dakota, Minnesota, Wisconsin, and Michigan. With the major winter storm on its way for Thanksgiving, a lot of corn will not make it to the bin until 2020,” Kluis told customers in daily note.
Kluis added, “The wheat market was very strong on Monday pulling corn higher, while soybeans again closed lower.”
2. A Large Drawdown of LP Stocks May Be Coming
Warren Wilczewski, Energy Information Administration (EIA) industry economist, says that this week’s propane inventory report to be released Wednesday may indicate further rise in demand for propane for grain drying.
The short-lived warming in the Midwest, which accounts for most of the agricultural and space heating demand for propane, allowed for some end-use inventory restocking and reduced price premiums. As weather cools again, propane demand will return to above-average levels for this time of year across much of the West, with the East Coast still due for above-average temperatures, and therefore below-average consumption,” Wilczweski wrote in a winter propane update report.
The report, issued last week, stated that propane inventories at many Midwest states are sitting below average levels.
3. A Midwestern Winter Storm Is On Its Way
The overall weather pattern over the central and western U.S. has become much more active as two major storm systems make weather headlines, according to the The National Weather Service (NWS).
“The first system will be an amplifying upper level trough over the Rockies and northern Plains that will support an intensifying surface low across the central Plains and then the Midwest by Tuesday night,” NWS forecasters stated Tuesday morning.
Upslope flow and cold temperatures north of the low will support a broad swath of moderate to heavy snowfall, extending from the Colorado and Wyoming Rockies to the Upper Peninsula of Michigan where winter storm warnings are currently in effect, according to the NWS forecast.
“Given the tight pressure gradient with this low pressure system, very windy conditions are likely across much of the Plains, and high wind warnings are in effect from eastern New Mexico to southern Kansas, where winds could gust in excess of 55 mph at times. High wind watches are in effect for portions of the Midwest and Ohio Valley as the storm approaches that region by Wednesday,” NWS forecasters stated in an update Tuesday.
Elsewhere across the nation, “Showers and thunderstorms are forecast to develop from the central Gulf Coast to the Ohio Valley in the warm sector of the developing storm system over the Plains, with rainfall amounts approaching 1 inch in some locations,” according to the NWS forecasters.