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3 Big Things Today, December 17

Soybean Futures Higher Overnight; Corn Net Longs Jump to Seven-Month High.

1. Soybeans Rise Overnight on Easing Trade Tensions

Soybeans rose from an eight-day low on easing tensions between the U.S. and China, the world’s two largest economies.

China last week bought a combined 1.43 million metric tons of soybeans from the U.S., the first purchases in months, after promises by Beijing that it would resume imports. China also said it would lower its tariff on U.S. cars from 40% to 15%, at least temporarily.

Sales of 130,000 tons to unknown buyers also were announced last week.

The U.S. on December 1 agreed to delay raising its tariff rate on $200 billion worth of Chinese goods until March 1 while negotiators from the U.S. and China try to hammer out a permanent trade deal. If one isn’t reached, the levy rate would rise to 25% from 10%.

Soybeans for January delivery rose 3½¢ to $9.04 a bushel overnight on the Chicago Board of Trade. Soy meal added $1.20 to $308.50 a short ton, and soy oil gained 0.02¢ to 28.51¢ a pound. 

Corn futures for December delivery rose ¼¢ to $3.85 a bushel.

Wheat for March delivery gained 6¢ to $5.36 a bushel overnight, and Kansas City futures added 5¼¢ to $5.23½ a bushel.


2. Money Managers Almost Turn Bullish on Beans, Push Corn Net Longs to Largest Since May

Money managers almost turned bullish on soybeans and increased their net-long positions, or bets on higher prices, in corn to the highest level since May, according to the Commodity Futures Trading Commission.

Speculators held only 683 net-short positions, or bets on lower prices, in soybean futures in the week that ended on December 11, the CFTC said in a report. That’s down from 12,576 futures contracts seven days earlier and smallest bearish position since June 5.

Investors are less bearish on soybeans since the White House announced on December 2 that the U.S. and China had agreed to, at least temporarily, resume trade negotiations.

Each side made concessions, with the U.S. agreeing to keep its tariff rate on Chinese goods at 10% for 90 days and China agreeing to resume purchases of agricultural products from the U.S. and lower its levy rate on American vehicles.

Money managers raised their net-long positions in corn to 89,734 futures contracts last week, up from 39,910 seven days earlier, the CFTC said. That’s the biggest bullish position in more than six months.

In wheat, speculators were slightly bullish, holding 742 net-long positions in hard red winter futures contracts, according to the government. That’s the first such position in a month.

Investors were still bearish on soft red winter wheat, holding 22,455 net-short positions, though that’s down from 27,025 a week earlier and the smallest net-short since October 16, 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. Parts of Oklahoma, Arkansas Under Dense Fog Warnings, Thunderstorms Aim For Southern Plains

Weather maps are mostly quiet in much of the Midwest today, though Arkansas, extreme eastern Oklahoma, and east Texas are under a dense fog advisory this morning, according to the National Weather Service.

Visibility in some areas will be less than ¼ mile, which could limit visibility. If temperatures fall below freezing when the fog is present, light icing may be possible on some roadways, the NWS said in a report early this morning.

Thunderstorms are possible starting this week in parts of the Southern Plains, including Oklahoma and Texas, the agency said.

In western Oklahoma and northwestern Texas, “critical fire conditions” are possible this week amid dry conditions and strong winds, the NWS said.

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