3 Big Things Today, December 9, 2019

Soybeans Higher in Overnight Trading; Money Managers Increase Bearish Bean Bets

1. Soybeans Slightly Higher Overnight on Trade Optimism

Soybeans were slightly higher in overnight trading on continued optimism about a trade deal with China.

White House Economic Council Director Larry Kudlow told CNBC that the countries – the world’s two largest economies – are “close” to a trade deal. Still, prices were capped as market-watchers have heard that refrain from lawmakers several times in the past 18 months.

The U.S. still plans to increase tariffs on more than $150 billion worth of Chinese goods on Dec. 15 if a deal isn’t in place, he told CNBC on Friday.

President Donald Trump will walk away from an agreement if certain conditions aren’t met, he said.

China last week said it would exempt some soybean and pork imports from tariffs for companies that applied, but few details were available after its initial announcement.  

Soybean futures for January delivery rose 3¢ to $8.92 ½ a bushel overnight on the Chicago Board of Trade. Soymeal gained 20¢ to $299.50 a short ton while soybean oil rose 0.23¢ to 31.45¢ a pound.

Corn futures for December delivery fell 3/4¢ to $3.76 a bushel.

Wheat for September delivery dropped 2 3/4¢ to $5.21 ¾ a bushel, while Kansas City futures lost 3/4¢ to $4.30 ¼ a bushel.

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2. Speculative Investors Increase Bearish Bets in Soybeans, Reduce Net-Shorts in Corn

Money managers increased their net-short positions, or bets on lower prices, in soybeans while curbing their bearish stance in corn.

Speculators were net short by 101,718 soybean futures contracts as of Dec. 3, according to the Commodity Futures Trading Commission.

That’s up from a net-short position of 44,656 futures contracts the previous week and the largest bearish stance since May 28, the CFTC said in a report.

Investors are likely turning sour on soybeans amid an ongoing trade war with China that has no end in sight and on an abundance of the oilseeds in storage.

In corn futures, meanwhile, money managers were less bearish week-to-week, holding 85,582 net-short positions, government data show. That’s down from a net-short position of 116,947 futures contracts the previous week.

Speculators also were less bearish on hard-red winter wheat futures, holding 14,481 net-short positions versus 17,020 such positions a week earlier.

Investors were more bullish on soft-red winter wheat, holding a net-18,008 long positions, or bets on higher prices, through Dec. 3. That’s up from 8,359 such positions the previous week and the largest bullish stance since Oct. 22, the CFTC said.

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3. Winter Storm Moves East Into Minnesota, Wisconsin, After Blasting North Dakota

Much of Minnesota and Wisconsin are facing harsh winter weather this morning as a storm that slammed North Dakota over the weekend moves east.

Almost every county in Minnesota and the northern three-fourths of Wisconsin are under a winter storm warning and advisory this morning, according to the National Weather Service.

In North Dakota, accumulations topped 7 inches in some places and blowing snow continues to reduce visibility. That storm is moving east through the Red River Valley into Minnesota this morning, the NWS said in a report early this morning.

The winter storm warning is in effect for much of north-central Minnesota and Wisconsin until 6 p.m. this evening. As much as a foot of snow will fall in some areas, the agency said in its report.

“Travel will be difficult,” the NWS said. “Heavy snow will create covered and slippery roads, along with reduced visibility.”