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3 Big Things Today, November 15

Soybeans, Corn Higher Overnight; Minneapolis Fed Says Northern Drought Further Hurts Ag Economy.

1. Soybeans, Corn Slightly Higher Overnight as Prices Now Extremely Oversold

Soybeans were slightly higher, rebounding from yesterday’s losses, as crop prices are now extremely oversold.

Bean futures on Monday and Tuesday declined 18¢ to the lowest level in six weeks. Corn yesterday lost more than 4¢, dropping to a contract low.

Prices fell yesterday amid declining oil prices that brought down the entire commodities complex and favorable weather in South America.

Still, the declines have put both beans and corn in oversold territory, said Bob Linneman from Kluis Commodities. Several analysts have said the crops are oversold and they expect a rebound from such low prices, but fundamentally there’s little to support a rally at this point.

Linneman said he sees support for beans at $9.61 and $3.34 a bushel for corn.

Soybean futures for January delivery rose 4½¢ $9.72¼ a bushel overnight on the Chicago Board of Trade. Soy meal added $1.50 to $311.80 a short ton, and soy oil gained 0.15¢ to 34.16¢ a pound.

Corn futures for December delivery rose ½¢ to $3.38 a bushel in Chicago.

Wheat futures declined a penny to $4.27 a bushel overnight in Chicago. Kansas City futures dropped 1¼¢ to $4.26¾ a bushel.

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2. Minneapolis Fed Report Paints Bleak Picture For Northern Plains Ag After Drought

A recent report from the Federal Reserve Bank of Minneapolis called the drought in the Northern Plains the “biggest story of the year” for the Fed’s Ninth District.

The drought, which continues to plague parts of the Dakotas and Montana, caused major crop damage, and forced rangers to sell off cattle due to lack of available feed, the bank said.

“Farm incomes continued to fall, according to the Minneapolis Fed’s third-quarter agricultural credit conditions survey,” the Fed said. “Land values retreated further across district states, and interest rates on loans were little changed from the previous quarter. The outlook for the fourth quarter is similar, with lenders in the district expecting farm incomes to decrease further.”

The one bright spot was that “tremendous” grain yields helped to blunt the effects of low commodity prices to a degree, but that’s little comfort to the region as a whole as 62% of district lenders surveyed said farm incomes decreased in the third quarter from a year earlier.

Only 11% of lenders in North Dakota said incomes increased; half said they decreased.

That’s had several knock-on effects including reduced spending on buildings and equipment. Some 74% of bankers reported decreased capital expenditures and only 3% reported increased spending.

Household spending was down, as well, with half saying it fell, and only 5% saying it rose, the Fed said.

In the fourth quarter, the picture isn’t rosy, with 65% of lenders expecting farm incomes to fall and only 7% expecting an increase, according to the bank. Capital spending likely will fall, while many lenders said they expect loan repayment rates to decline.

“‘This could be the worst year for the farmer in the last 20 years,’ wrote a Minnesota banker,” the Minneapolis Fed said. “If true, the fourth quarter won’t be much better than the third, which was supported by survey results on the outlook.”  

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3. Storm to Bring Snow, Rainfall to Parts of Minnesota, Iowa, Wisconsin; Indiana to Get Showers

A storm is brewing where Minnesota, Iowa, and Wisconsin meet that could bring snowfall and slippery roads.

Accumulations of up to 2 inches is expected in parts of the region starting tonight, though only an inch is expected in southern counties, the National Weather Service said in a note on Wednesday morning.

Travel will be hazardous tomorrow night across north-central and central Wisconsin, as a wintry mix is expected to spread throughout the state, the NWS said. The precipitation is expected to change to all rain late Friday morning.

More snow is expected in southern Wisconsin into northern Illinois this weekend.

While it’s snowing in Wisconsin, isolated thunderstorms and gusty winds are expected in parts of southern Illinois and Indiana today and tonight, according to the NWS.

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