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3 Big Things Today, December 11

Soybean Futures Higher Overnight; Money Managers Turn Bullish on Corn.

1. Soybeans Rebound Amid Cautious Optimism on Trade

Soybeans futures rebounded overnight as investors were cautiously optimistic that China will resume imports from the U.S.

Several media reports citing government officials said Beijing is attempting to finalize small details including the amount it’ll authorize importers to purchase.

The U.S. and China agreed on a cursory deal in which the U.S. promised to not raise tariff rates on January 1, as planned, and China agreed to purchase more farm goods from the U.S., according to a statement from the White House.

Negotiators are working on a more permanent agreement, and have a U.S.-imposed deadline of March 1. If a deal isn’t reached, the tariff rate will jump to 25% from its current level of 10%.

Soybeans for January delivery rose 4½¢ to $9.14¼ a bushel overnight on the Chicago Board of Trade. Soy meal gained 50¢ to $310.50 a short ton, and soy oil added 0.03¢ to 28.79¢ a pound. 

Corn futures for December delivery rose ¼¢ to $3.84¼ a bushel.

Wheat for March delivery gained ¾¢ to $5.26 a bushel overnight, and Kansas City futures added ½¢ to $5.10¾ a bushel.

**

2. Money Managers Turn Bullish on Corn as Demand For U.S. Supplies Surges

Money managers turned bullish on corn in the seven days that ended on December 4, pushing their net-long positions, or bets on higher prices, to the largest level in six months.

Investors were net long by 39,910 corn futures contracts last week – the biggest such position since early June – up from a net-short position, or bets on lower prices, of 31,054 net-short contracts the previous week, according to the Commodity Futures Trading Commission.

Demand for U.S. corn has been robust since the start of the marketing year on September 1. Accumulated shipments of the grain are up 83% year over year, while sales have risen 17%, USDA data show.

Speculators were less bearish on soybeans last week, pushing their net-short positions down to 12,576 futures contracts from 59,303 a week earlier, the CFTC said. That’s the smallest net-short position since the seven days that ended on June 12.

In wheat, money managers reduced their net-short positions in soft red winter varieties to 27,025 futures contracts last week. That’s down from 38,744 contracts a week earlier, according to the government.

Investors held 4,183 net-short positions in hard red winter wheat, down from 10,748 contracts the previous week, the CFTC said.

The Weekly Commitment of Traders Report from the Commodity Futures Trading Commission shows trader positions in futures markets.

The report provides positions held by commercial traders, or those using futures to hedge their physical assets; noncommercial traders, or money managers (also called large speculators); and nonreportables, or small speculators.

A net-long position indicates more traders are betting on higher prices, while a net-short position means more are betting futures will decline.

**

3. Freezing Rain, Snow Possible For Parts of Eastern Iowa, Northern Illinois

A mix of light freezing rain and snow is possible late tonight in much of eastern Iowa and northern Illinois, according to the National Weather Service.

Roads could become slippery from a “light glazing” of ice and minor snow accumulations tonight, the NWS said in a report early this morning. There’s also a chance of freezing drizzle north of Interstate 80, along with about ½ inch of snow.

Farther south, a freezing fog warning is in effect for parts of eastern Arkansas, northern Mississippi, and almost all of Tennessee.

The advisory is in effect until 10 a.m., with visibility being reduced to ¼ mile or less in several areas, according to the agency. 

Temperatures will be in the low to mid-20s across the region.

“The fog will be dense at times, especially near bodies of water, and that could result in slippery conditions on area bridges and overpasses, in addition to reducing visibility for driving,” the NWS said.

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