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3 Big Things Today, December 19

Soybeans Slightly Higher Overnight; Optimism High as U.S., China Set to Meet in January.

1. Soybeans Modestly Higher on China Purchases

Soybeans were modestly higher overnight after China bought more soybeans from the U.S., the second round of purchases since a temporary trade deal made between the countries at the start of December.

China purchased an unknown amount of soybeans from the U.S., but media reports peg the total at just under 1 million metric tons. That’s on top of the roughly 1.5 million tons the Asian nation, once the biggest buyer of U.S. soybeans, purchased last week.

Reuters reported that three traders will knowledge of the transactions and the U.S. Soybean Export Council all confirmed the purchases.

Soybean exports in the 2018-2019 marketing year that started on September 1 are pegged at 1.9 billion bushels, down from 2.129 billion a year earlier, the USDA said in a report last week.

The decline in shipments is partially to blame, along with increased production, for stockpiles more than doubling year over year to 955 million bushels, according to USDA data.

Soybeans for January delivery rose 1¼¢ to $9.09 a bushel overnight on the Chicago Board of Trade. Soy meal fell 40¢ to $310 a short ton, and soy oil gained 0.24¢ to 28.65¢ a pound. 

Corn futures for December delivery fell a penny to $3.84½ a bushel.

Wheat for March delivery fell 6¢ to $5.26¾ a bushel overnight, and Kansas City futures declined 4¼¢ to $5.13 a bushel.

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2. Trade Optimism High as Mnuchin Says U.S., China Negotiators Will Meet in January

Things are looking up on the trade front as negotiators from the U.S. and China, according to China’s Commerce Ministry, spoke on the phone today.

Formal meetings are reportedly scheduled for January when officials from the world’s two largest economies will meet face-to-face in a bid to hammer out a trade deal, U.S. Commerce Secretary Steve Mnuchin said.  

The goal is to come to an agreement by March 1. If the sides haven’t found common ground by then, the U.S. plans to raise its tariff rate on $200 billion worth of Chinese goods from 10% to 25%.

China, meanwhile, has agreed to buy more U.S. agricultural products, as evidenced by its recent soybean purchases, and cut a tariff on U.S. vehicles from 40% to 15%, at least temporarily.

The U.S. goods trade deficit with China reached a record high in October, rising to $43.1 billion, according to data from the Commerce Department. The trade deficit to all countries reached the highest in a decade, jumped to $55.5 billion in October, the department said.

A deal would be very timely, as U.S. soybean export sales and shipments have suffered from the loss of China.

Sales of the oilseeds globally since the start of the marketing year on September 1 are down 34% vs. the same period last year, according to the USDA. Actual shipments have plunged 41%, the USDA said.

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3. Freezing Rain Expected Today For Parts of Southern Minnesota, Northern Iowa

Freezing rain is expected for several counties in southern Minnesota, northern Iowa, and southwest Wisconsin today, according to the National Weather Service.

“Patchy, light freezing rain is possible this morning and again later tonight,” the NWS said in a report early Wednesday morning. “This could produce slick spots on any untreated roadways.”

Light freezing drizzle is possible on Thursday morning and could increase the number of slick spots on untreated roadways, the agency said.

Farther east, rainfall is likely to move into Ohio starting tomorrow, which will persist through Friday morning. As much as 1¼ inches is expected in the area, which if it falls fast enough could cause some flooding in rivers and creeks in northern counties.

Winds will kick up with gusts of up to 40 mph on Friday when the rainfall is expected to change to snow. Some accumulations are possible, the NWS said.

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