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3 Big Things Today, December 13

Soybeans, Corn Little Changed Overnight; WASDE Report Has Ups, Downs.

1. Soybeans, Corn Little Changed After Monthly USDA Report

Soybeans and corn were little changed, but there was a bias to the upside in overnight trading after the World Agricultural Supply and Demand Estimates (WASDE) Report yesterday.

The report from the USDA came out as most analysts had expected, so there wasn’t much market movement on the day. Still, the USDA lowered its forecast for corn stockpiles due to higher use in ethanol production, the one bullish figure in the report.

Investors aren’t getting too excited, however, as the government raised its forecast for domestic soybean stockpiles amid weak export demand.

The weather in Argentina is still playing a role in price moves, as dry weather is expected to continue in the country’s growing areas at least until the end of the week. Some rain, however, is in the forecast.

Soybean futures for January delivery rose 2¾¢ to $9.78½ a bushel overnight on the Chicago Board of Trade. Soy meal added 50¢ to $325.20 a short ton, and soy oil declined 0.07¢ to 33.38¢ a pound.

Corn futures for March delivery rose ¾¢ to $3.48¼ a bushel in Chicago.

Chicago wheat for March delivery rose 2¼¢ to $4.13 a bushel overnight, and Kansas City futures gained 2½¢ to $4.13¾ a bushel.

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2. December WASDE Report, Like Recent Markets, Has Positives, Negatives

The USDA’s WASDE Report came out like most figured it would with some positives to speak of, but also some negatives.

First, the bad news.

Soybean stockpiles at the end of the marketing year were seen at 445 million bushels by the government, up from last month’s projection of 425 million bushels and consensus of 438 million bushels.

The USDA accomplished this by reducing its forecast for exports by 20 million bushels. The move was justified, analysts said. Exporters since the start of the marketing year on September 1 have sold 36.3 million metric tons of beans, down 16% from the same time frame a year earlier.

Corn sales are worse with total commitments from overseas buyers trailing the year-ago pace by 27%, according to the USDA.

Despite the weak sales in corn, the government reduced its outlook for corn stockpiles on August 31.

Stockpiles are now pegged at 2.437 billion bushels, down from the month-ago estimate of 2.487 billion bushels and behind the average estimate for 2.478 billion bushels, giving prices a solid underpinning.

While export sales aren’t exactly going gangbusters, ethanol production is. The EIA has reported record output by ethanol producers in two of the past three weeks.

The USDA said ethanol companies will increase use by 50 million bushels to 5.525 billion bushels in 2017-2018.

The push and pull from the WASDE Report likely will keep prices range bound for another few weeks barring any black swan events, analysts said.

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3. Band of Arctic Air Brings Wintry Weather to Much of Northern U.S.

A band of Arctic air has moved into the Northern Plains and Great Lakes regions, plunging the area into a deep freeze.

A winter weather advisory has been issued for a large swath of land stretching from extreme eastern North Dakota all the way east into Pennsylvania, according to the National Weather Service.

In northern Wisconsin, as much as 5 inches of snow are expected today, reducing visibility and making travel difficult.

Across Lake Michigan, a winter storm warning is in effect for much of the state of Michigan today. Total snow accumulations are expected from 5 to 8 inches, the NWS said in a report early Wednesday. The snow is expected to fall from about 7 a.m. to 11 p.m. today.

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