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3 Big Things Today, December 24

Soybeans Fall Overnight; Money Managers Bearish on Beans First Time in Months

1. Soybeans Decline Overnight on Ongoing China Worries

Soybeans were lower in overnight trading amid ongoing concerns that China’s recent purchases came in below expectations and amid rising geopolitical tensions.

China has purchased more than 2.7 million metric tons of U.S. soybeans in the past two weeks, but traders and analysts were unhappy with the total, saying it was smaller than expected.

Many also are concerned that the U.S. and China won’t find common ground in upcoming negotiations, which would mean an extension of the trade war brewing between the two countries.

The U.S. and China came to a temporary agreement at the start of the month 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%. China will no doubt re-establish or impose new tariffs on U.S. products.

Soybeans for January delivery fell 5 1/4¢ to $8.92 ½ a bushel overnight on the Chicago Board of Trade. Soymeal lost 60¢ to $309.50 a short ton and soy oil lost 0.08¢ to 28.09¢ a pound. 

Corn futures for December delivery fell 2 3/4¢ a penny to $3.75 ¾ a bushel.

Wheat for March delivery rose 1¢ to $5.15 a bushel overnight and Kansas City futures were unchanged at $5.02 ¾ a bushel.


2. Money Managers Turn Bullish on Soybean Futures First Time Since June

Money managers turned positive on soybean futures for the first time in six months while pushing their net-long positions, or bets on higher prices, in corn to the largest level since May.

Speculators held 13,166 net-long positions in soybeans in the week that ended on Dec. 18. That’s up from a net-short position of 683 futures contracts a week earlier and the first bullish position since the seven days that ended on June 12, according to the Commodity Futures Trading Commission.

Investors have become more bullish on beans in recent weeks as China has resumed purchases of U.S. supplies.

Speculative investors were net long by 124,427 corn futures contracts as of last week, up from 89,734 contracts a week earlier, the CFTC said in a report. That’s the biggest such positions since the seven days that ended on May 29.

Export sales of corn have been extremely strong in recent months. The U.S. Department of Agriculture on Friday said exporters sold another 222,504 metric tons of corn to an unknown buyer. Sales of 115,500 metric tons of soybeans also were announced.

In wheat, investors bumped their net-long positions in hard-red winter contracts to 3,908, up from 742 futures contracts the prior week, the government said. That’s the biggest such position since Nov. 6.

Money managers reduced their net-short positions, or bets on lower prices, in soft-red winter wheat to 3,612 futures contracts, well below the 22,455 contracts recorded a week earlier. That’s the smallest net-short position since September, according to the CFTC.

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. Calm Weather Likely Will Give Way to Wintry Mix in Parts of South Dakota, Nebraska

Oh the weather outside is … pretty decent, actually, but Mother Nature likely will let it snow, let it snow, let it snow later this week in parts of the central Midwest.

While no hazardous weather is on tap for today, a winter storm will begin moving across parts of South Dakota and Nebraska starting on Wednesday, according to the National Weather Service.

Stock up on some corn for popping as parts of east and central South Dakota could see a wintry mix through Friday that includes snow and strong winds that could lead to drifts, the NWS said in a report early Monday morning. Rain will be in the mix from Yankton, South Dakota, to Marshall, Minnesota, on Thursday.

Some snow is in the forecast for parts of northwestern Missouri where only a dusting will fall.

Further east, less than a half-inch of snow is expected tonight in parts of eastern Iowa, mostly south of Interstate 80, the agency said. Some untreated roads may become slick as the precipitation falls, the NWS said.

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