3 Big Things Today, December 5, 2019

Byline:

1. Soybeans Slightly Higher on Trade Optimism, Grains Little Changed

Soybeans were slightly higher on continued optimism about a trade deal with China, while grains were little changed overnight.

A report from Bloomberg News citing sources familiar with the matter said there’s still hope a deal between the U.S. and China – the world’s largest economies – will be reached by the December 15 when new tariffs on more than $150 billion in Chinese goods are expected to kick in.

President Donald Trump has said the tariffs will go into effect without a trade deal. He also told reporters this week that he wouldn’t mind if an agreement wasn’t reached until after the 2020 elections.

China hasn’t indicated that negotiations have bore fruit thus far, and after about 18 months of talks, market-watchers are wary of reports that a deal is near.

Soybean futures for January delivery rose 2¢ to $8.80 a bushel overnight on the Chicago Board of Trade. Soy meal fell 70¢ to $296 a short ton, while soybean oil rose 0.3¢ to 30.77¢ a pound.

Corn futures for December delivery fell ½¢ to $3.78 a bushel.

Wheat for September delivery gained 1¼¢ to $5.28¾ a bushel, while Kansas City futures added ¾¢ to $4.41¼ a bushel.

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2. Ethanol Output Rises to Highest in More Than Four Months, Stockpiles Increase

Ethanol production rose to the highest level in more than four months and stockpiles increased week to week, according to the Energy Information Administration.

Output in the seven days that ended on November 29 averaged 1.06 million barrels a day, the EIA said in a report. That’s up from 1.059 million barrels a day, on average, the previous week and the highest level since July 12.

In the Midwest, by far the biggest production area, output was reported at 983,000 barrels a day, on average. That’s up from 980,000 barrels a day, and also the highest level since mid-July.

East Coast production came in at 27,000 barrels a day, up from 26,000 the previous week.

Rocky Mountain output was unchanged at an average of 14,000 barrels a day, and West Coast production was unchanged week to week at 17,000 barrels a day.

Gulf Coast production declined to 20,000 barrels a day, on average, from 22,000 barrels the prior week, the EIA said in its report.

Stockpiles, meanwhile, increased to 20.639 million barrels a day from 20.277 million seven days earlier. That’s the highest level since November 8, according to the government.

In other news, the Weekly Export Sales Report is due out this morning.

Analysts are looking for corn sales from 500,000 to 900,000 metric tons, soybean sales from 700,000 to 1.3 million tons, and wheat sales from 300,000 to 700,000 tons, according to researcher Allendale.

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3. Rain Expected in Parts of Oklahoma, Arkansas as Fast-Moving Storm Moves Through

Weather maps are again quiet this morning, though some rain is expected in parts of Oklahoma into Arkansas, according to the National Weather Service.  

Isolated thunderstorms are possible starting this evening in parts of southeastern Oklahoma, the NWS said in a report early this morning.

The storms will move fast and likely won’t be severe.

In western South Dakota and northeastern Wyoming, freezing fog is expected to develop tonight, which could reduce visibility and make travel dangerous.

Light snow is expected this weekend, but only an inch of accumulation is expected, the NWS said.