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3 Big Things Today, December 21

Soybeans Lower Overnight; Export Sales Jump to Marketing-Year High as China Resumes Buying

1. Soybeans Fall to Three-Week Low as China Purchases Miss Forecasts

Soybeans fell to the lowest level in three weeks amid China purchases that were lower than expected.

Analysts have said China’s purchases of more than 1.5 million metric tons last week and roughly 1.2 million tons this week were below forecasts, which has kept a lid on prices.

The U.S. and China came to a temporary agreement under which Washington would leave its tariff rate on $200 billion worth of goods from the Asian country and Beijing agreed to buy more agricultural products from the U.S.

Negotiators have until March 1 to come to a permanent agreement or the U.S. tariff rate will jump from 10% to 25%.

Despite them being below expectations, China’s soybean purchases come at a crucial time. Accumulated exports of soybeans from the U.S. since the start of the marketing year on Sept. 1 are down 40% year-over-year, the USDA said. Sales are down 30%.

Exports in the 2018-2019 marketing year that started on Sept. 1 are pegged at 1.9 billion bushels, down from 2.129 billion a year earlier, the Department of Agriculture said in a report last week.

Soybeans for January delivery fell 2 1/4¢ to $8.91 ¼  a bushel overnight on the Chicago Board of Trade. Soymeal lost 50¢ to $307.20 a short ton and soy oil lost 0.04¢ to 28.44¢ a pound. 

Corn futures for December delivery rose a penny to $3.76 ¼ a bushel.

Wheat for March delivery dropped 6 1/4¢ to $5.17 ¼ a bushel overnight and Kansas City futures declined 6¢ to $5.03 ½ a bushel.

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2. Soybean Export Sales Surge to Marketing-Year High After China Resumes Purchases

Soybean sales for overseas delivery jumped to a marketing-year higher in the seven days through Dec. 13 after China came back into the market.

Sales surged to 2.84 million metric tons, easily the largest amount since the 2018-2019 marketing year started on Sept. 1 and well above the prior four-week average, after China resumed purchases of U.S. oilseeds. Analysts had forecast sales from 2.1 million to 2.7 million tons.

The Asian nation bought more than half of the total – 1.56 million metric tons – while Mexico took 324,300 tons, the Netherlands was in for 184,500 tons, Germany purchased 170,000 tons and Egypt too 168,700 tons, the USDA said.

China agreed to buy more U.S. agricultural products and reduce levies on American cars, while the U.S. agreed to keep its tariff rate on Chinese goods at 10% instead of raising it to 25% as planned.

Corn sales last week totaled 1.97 million metric tons, also a marketing-year high, the USDA said in a report. Still, analysts had expected sales from 2.3 million to 2.9 million metric tons, according to researcher Allendale.

Mexico bought 1.34 million metric tons, Japan was in for 391,200 tons and Colombia purchased 189,900 tons, the government said. The Philippines took 50,000 tons and Canada bought 13,000 tons. An unknown customer canceled a shipment for 40,700 tons.

Wheat sales totaled 313,600 metric tons, down 58% from the prior week and 42% from the four-week average. Analysts expected sales from 500,000 to 700,000 tons.

Japan was the big buyer at 71,300 tons, Ecuador took 53,000 tons, Taiwan was in for 52,400 tons, Italy purchased 47,900 tons and Nigeria was in for 26,000 tons. The total would’ve been higher but an unknown customer canceled cargoes totaling 38,400 tons, the USDA said.

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3. Northern Illinois May See Freezing Drizzle, Fire Warnings Issued in Southern Plains

Parts of northern Illinois could see spotty freezing drizzle starting tomorrow, and some light snow is in the forecast, according to the National Weather Service.

Little, if any, accumulation is expected from the snowfall, the NWS said in a report early Friday morning.

Gale-force winds are expected across the Indiana shore of Lake Michigan, which could cause some flooding near the water, the agency said.

In the southern Plains, meanwhile, strong winds and low humidity have increased the risk of wildfires in the Oklahoma and Texas panhandles.

“Breezy winds and relative humidity values below 20% will cause elevated fire weather conditions across the far southwestern Texas panhandle this afternoon,” the NWS said in its report. “Area fire managers and emergency officials should be alert for elevated fire weather conditions.”

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