3 Big Things, November 27, 2019

President Trump sees a deal coming with China.

1. Ag Markets Trend Higher, Ahead of Thanksgiving Holiday Break

In overnight trading, the December corn futures are 1¢ higher at $3.68. March futures are 1¼¢ higher at $3.79.

January soybean futures are 3¢ higher at $8.87¼. March soybean futures are 3¢ higher at $9.01¾.

December wheat futures are 2¢ higher at $5.33.

In the outside markets, the U.S. dollar is higher, and the Dow Jones Industrials are seen higher.

World stocks are within two points of a record-high Wednesday, as U.S. President Donald Trump said Washington and Beijing were in the final stage of inking an initial trade deal.

Al Kluis, Kluis Advisors, says that the market bulls may have their eyes on Christmas and not Thanksgiving.  

“Soybean prices fell to the lowest level since September 11. January soybeans are less than 20¢ away from the major mid-September low. The bulls were unable to rally prices after the better-than-expected export inspection number early this week. Although the export picture continues to move in the right direction for soybeans, the friendly news did not help this week. If the bulls are waiting for a good time to jump back into the mix, then, historically, Thanksgiving has set many extremes. The bears look to claim Thanksgiving; will the bulls take Christmas?” Kluis posed to customers in daily note.

Kluis added, “A strong cash corn market combined with this unfolding blizzard could be enough to light a spark for the bull camp. Basis levels could tighten further if ethanol plants start feeling nervous about supply.”   

2. President Trump Sees China Trade Deal

Just as Deere & Co. reported weaker fourth quarter earnings Wednesday, caused mostly by slow farmer purchases of equipment and hurtful trade tariffs with China, U.S. President Donald Trump is stating that a trade deal is near.

On Tuesday, after top negotiators from the U.S. and China agreed to keep working on remaining issues, President Trump announced that the first phase of a trade deal is imminent.

U.S. market watchwers won’t believe a trade deal is complete until U.S. soybeans head to China in larger volumes.

This week, Chinese buyers picked up at least 20 cargoes of Brazilian soybeans, due to the uncertainty over a trade deal with the U.S.

As for Deere & Co., for the quarter ended on November 3, it reported an adjusted profit of $2.14 per share, down from $2.30 per share last year, Reuters reported Wednesday.

That compares to average analyst estimates of $2.13 per share, according to Refinitiv Eikon data, the Reuters article stated.

3. Snow, High Winds Hitting the Midwest Wednesday

An extremely active weather pattern is in place across much of the U.S. with two large storm systems making weather headlines this week, according to the National Weather Service (NWS).  

“The first storm will be a strong surface low tracking eastward across the Great Lakes on Wednesday and then toward New England by Wednesday night. Given the tight pressure gradient with this low pressure system, very windy conditions are likely across much of the Midwest and Ohio Valley regions where winds could gust in excess of 50 mph at times. High-wind warnings are in effect from the greater Kansas City area to western Ohio, and there arewind advisories farther south from Arkansas to the Mid-Atlantic region,” the NWS forecasters stated Wednesday .  

To the north of the surface low will be a swath of moderate to heavy snow across the Upper Midwest on Wednesday where winter storm warnings are in effect. Severe travel disruptions are likely for these areas, according to the NWS forecasters.

Elsewhere across the nation, “Showers and a few thunderstorms are forecast from the Southeast U.S. to the Mid-Atlantic and New England ahead of the cold front, with rainfall amounts approaching half an inch in some locations,” according to the NWS forecasters.

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