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3 Big Things Today, November 15

Soybeans Surge in Overnight Trading; Rising Dollar Makes Export Sales Difficult.

1. Soybeans Surge Overnight on Trade Optimism

Soybeans jumped overnight after China made trade overtures to the U.S. ahead of a meeting later this month between presidents Trump and Xi Jinping.

China reportedly sent the note in a bid to move trade talks along, but reports are that the offer doesn’t include several items that Washington deems as must-haves. Still, the letter to the White House is an opening bid and indicates that negotiations have started, even if informally.

The U.S. and China have been involved in a mostly tit-for-tat trade dispute for months, slapping tariffs on tens of billions of dollars’ worth of each other’s goods. Soybean sales this year have suffered as China was, prior to the dispute, the biggest buyer of U.S. supplies.

Negotiators from the world’s two largest economies were quiet for months as the U.S. hammered out trade deals with Mexico and Canada to replace the North American Free Trade Agreement, so any movement is considered positive.

Soybeans for January delivery rose 9¾¢ to $8.93¼ a bushel overnight on the Chicago Board of Trade. Soy meal futures gained $2.50 to $308.20 a short ton, and soy oil added 0.12¢ to 27.69¢ a pound.

Corn futures for December delivery improved 1½¢ to $3.68½ a bushel overnight.

Wheat for December gained 4¢ to $5.07 a bushel, while Kansas City futures rose 1¾¢ to $4.82¾ a bushel.

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2. Value of Dollar Hits Highest Since June 2017, Making Life Harder For Challenged Exporters

The value of the dollar crept to the highest level in almost a year and a half this week, and jumped again overnight, as the economy looks strong and the Federal Reserve continues to increase interest rates.

That’s bad news for farmers who’ve seen export sales of soybeans plunge in recent months due to the ongoing trade war with China.

Exporters are in the midst of attempting to find new trade partners for dollar-denominated products, and a strengthening greenback isn’t helping, as it makes products from the U.S. more expensive for overseas buyers.

Soybean sales since the start of the marketing year on September 1 are down 31% vs. the same time frame last year, according to the USDA. Wheat sales since the start of the grain’s marketing year are down 16%.

Export inspections of soybeans for overseas delivery so far this year are at 9.91 million metric tons, down from 17.1 million tons at this point in 2017, the USDA said. The lack of buying from China due to the ongoing trade dispute with the U.S. has severely curbed overall demand for U.S. inventories.

Wheat inspections since the start of the grain’s marketing year on June 1 are at 9.3 million metric tons, down from 11.8 million tons inspected during the same period last year.

Demand for U.S. corn has been a surprising bright spot. Sales of the grain to overseas buyers are up 16% since September 1 vs. the same period last year, according to the government. Year over year, inspections for overseas delivery are at 11.1 million metric tons, easily topping the 5.96 million tons during the same time frame in 2017.

The dollar on Tuesday closed at its highest value against a basket of its counterparts and is up 0.3% overnight after Fed Chair Jerome Powell said in a speech last night that the U.S. economy is still humming along and that more interest rate hikes are likely.

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3. Winter Weather Hammering Much of Eastern Midwest to the Atlantic Ocean

Winter weather is hammering parts of the eastern half of the U.S. including several areas in the southern Midwest.

The southern two thirds of Illinois are facing winter storms and ice warnings this morning, according to the National Weather Service.

A winter storm warning is in effect until 6 p.m. Thursday in several counties in southwestern Illinois and southeastern Missouri, the NWS said in an early morning report. To the east, an ice storm warning is in effect in dozens of counties in southern Indiana.

Another 4 inches of snow are expected in some areas and “significant icing” is forecast, the government said. Large amounts of ice in the area will make roads slippery or impassable. Travel is not advised.

Winter storm warnings and advisories stretch from the bootheel of Missouri to the East Coast, stretching through Illinois, Indiana, Ohio, and all states east to the Atlantic Ocean, according to the NWS.

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