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3 Big Things Today, December 14

Soybeans Decline Overnight; Weekly Export Sales of Corn Lower, Wheat Higher

1. Soybeans Fall as Traders Take Wait-And-See Approach to Trade

Soybeans were lower in overnight trading as traders, growers, and other investors continue to take a wait-and-see approach on trade even after China purchased U.S. supplies.

The U.S. Department of Agriculture said yesterday that China bought 1.13 million metric tons of U.S. beans for delivery in the 2018-2019 marketing year that started on September 1.

Still, some market-watchers thought the amount was too low, and many are concerned about the state of trade talks between the world’s two largest economies.

Goldman Sachs said in a note to clients Thursday that it’s unlikely negotiators will be able to hammer out a deal in 90 days – the allotted time the U.S. has given before it says it will raise tariffs. The U.S. and China have been involved in a trade war that escalated on July 1 when the U.S. imposed tariffs on $50 billion worth of Chinese goods, and China retaliated by imposing duties on the same amount of U.S. goods.

Since then, it’s been a tit-for-tat battle. The U.S. now has a 10% levy on $200 billion worth of goods from the Asian nation, which will go up to 25% on March 1 if a deal isn’t struck.

Soybeans for January delivery fell 5½¢ to $9.01½ a bushel overnight on the Chicago Board of Trade. Soymeal lost 60¢ to $307.90 a short ton, and soy oil declined 0.21¢ to 28.62¢ a pound. 

Corn futures for December delivery declined ¼¢ to $3.84 a bushel.

Wheat for March delivery fell 3¢ to $5.33 a bushel overnight and Kansas City futures lost 1½¢ to $5.18½ a bushel.

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2. Export Sales of Corn Decline Week-to-Week, Wheat Rises, Soybeans Mixed

Sales of corn to overseas buyers were lower in the seven days that ended on December 6 while wheat rose and soybeans were mixed.

Exporters sold 903,200 metric tons of corn, down 23% from the previous week and 14% from the prior four-week average, the U.S. Department of Agriculture said in a report. Analysts had pegged sales from 1 million to 1.5 million tons, Allendale said.

Japan was the big buyer last week at 608,400 metric tons, followed by Mexico at 234,600 tons and Saudi Arabia at 146,500 tons, the government said. Colombia took 29,800 tons and New Zealand bought 30,000 tons.

Wheat sales totaled 754,100 metric tons, up 6% week-to-week and 62% from the average, on the high end of expectations for sales of 500,000 to 800,000 tons.

An unknown buyer was in for 210,600 tons, Japan bought 111,900 tons, Nigeria purchased 89,000 tons, Singapore took 65,000 tons, and Mexico was in for 61,700 tons, the USDA said.

Weekly soybean sales, meanwhile, fell 11% but were up 25% from the prior four-week average, according to the government. Analysts had pegged sales from 700,000 to 1 million tons.

The Netherlands bought 140,600 tons, Saudi Arabia was in for 131,500 tons, Japan purchased 124,700 tons, and Taiwan took 69,700 tons, the agency said. The total would have been higher, but Switzerland and China each canceled orders for 60,000 tons from the U.S.

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3. Dense Fog Advisory Issued in Parts of Central Midwest as Visibilities Drop to Zero

A dense fog advisory is in effect this morning for much of eastern Iowa, northeast Missouri and northwest and central Illinois, which will reduce visibility and cause slick roadways, according to the National Weather Service.

Visibility in some areas is below .25 mile with localized visibilities near zero, the NWS’s Quad Cities station said in a report early this morning. The advisory is in effect until 9 a.m. local time.

Frost-covered roadways may occur in parts of central Iowa this morning, making roadways slick and dangerous, the agency said.

In southern Missouri, meanwhile, a flood watch is in effect for several counties as up to 2 inches of rain will fall Friday and Saturday, causing some waterways to overflow their banks.

Periods of “moderate” rain will continue through the area at least through tomorrow morning, the NWS said.

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