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3 Big Things Today, December 5

Soybeans Lower in Overnight Trading; Ag Producer Sentiment Declines Slightly

1. Soybeans Decline Overnight on Trade Caution

Soybeans were modestly lower and grains declined overnight Wednesday as investors slow buying until they see evidence that China will resume purchases of U.S. agricultural products.

Presidents Trump said he and counterpart Xi Jinping came to an agreement in which the U.S. will leave its tariff rate on $200 billion worth of Chinese goods at 10% instead of raising it to 25%, and that China would immediately begin buying from U.S. supplies.

China’s Ministry of Commerce on Wednesday said in a vague statement on its website that Beijing would begin “implementing specific issues on which consensus has been reached, and the sooner, the better.” China still hasn’t confirmed Trump’s assertions that it will curb auto tariffs or buy more agricultural products from the U.S.

Investors on Monday were elated about the news, pushing prices up a dime, and again were excited yesterday, but overnight, they struck a more cautious tone at least until they get more confirmation that China will in fact resume purchases of U.S. soybeans.  

Soybeans for January delivery fell 3¢ to $9.08 ¾ a bushel overnight on the Chicago Board of Trade. Soymeal declined $1.20 to $313.30 a short ton and soy oil lost 0.11¢ to 28.57¢ a pound. 

Corn futures for December delivery fell 2¢ to $3.82 ¾ a bushel.

Wheat futures declined on signs of slack demand for U.S. supplies. Inspections for overseas delivery since June 1 are down 17% from the same period a year earlier, the Department of Agriculture said in a report this week. Accumulated exports so far this marketing year are down 18% year-over-year, according to the USDA.

Wheat for March delivery fell 4 3/4¢ to $5.17 ¾ a bushel overnight and Kansas City futures lost 6 1/4¢ to $4.99 a bushel.

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2. Agriculture Producer Sentiment Declines Slightly in November

Agriculture producer sentiment fell only slightly month-to-month in November as growers generally remained optimistic about the sector, according to the Purdue University/CME Group Ag Economy Barometer.

The gauge came in at a reading of 134, down 2 points from October, said the report, which surveyed 400 agricultural producers from across the country. That leaves the barometer down 6% from its cycle high in June before the U.S.-China trade war began.

The current conditions index was steady at a 115 reading while the index of future expectations dropped 3 points to a 143 print, the survey said.

Despite the slight decline in the barometer, the investment index, which asks growers whether they believe now is a good time or bad time to make large investments, stood at a 56 reading, up from a 52 in October and a 42 in September.

“Although there was a modest decline in the barometer this month, there was some evidence that producers are becoming more confident regarding the U.S. agricultural economy’s future,” said James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

Growers also were more optimistic in November concerned long-term farmland values, with half saying they expect land prices to increase, a marked increase from October when only 21% said they expected higher values.

Still, only 13% said they believe farm profitability will improve in the next 12 months, while 44% said they see equity decline in the next year. Some 85% of respondents said they expect interest rates to rise in the next year and 76% said they believe rates will be higher in five years than they are now, the report said.

The Farm Bill was a major worry with 75% of respondents saying they were “somewhat” or “very” concerned that Congress hadn’t passed new legislation.

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3. Snow, Ice Forecast in Indiana, Ohio; Winter Weather Advisory Issued in Kentucky

More snow and ice are forecast for much of Indiana and western Ohio today while a winter weather advisory has been issued for parts of Kentucky.

In Indiana, minor accumulations of snow are expected this morning along with freezing drizzle, according to the National Weather Service. The drizzle should end by about 7 a.m. local time, the NWS said in a report early this morning.

More light snow is possible tomorrow, with some small amounts accumulating.

In Ohio, snowfall is forecast today, though it’ll be light, and freezing drizzle will mean slippery roads this morning, the agency said. Accumulations of snow on Thursday will total about an inch.

An inch of snow is expected to fall in parts of Kentucky today, which could make for some difficult travel conditions, the NWS said.

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