Soybeans Inch Lower Ahead of Signing of U.S.-China Trade Deal
Soybeans for March delivery fell 0.1% to $9.44 a bushel on the Chicago Board of Trade on Tuesday, as traders grew skeptical of what the limited trade deal with China will actually mean for U.S. farmers.
Corn for March delivery lost 0.1% to $3.84 1/2 a bushel.
Wheat for March delivery rose 0.1% to $5.50 1/4 a bushel.
Farmers Optimistic on Future, Current Sentiment Down -- Market Talk
14:52 ET - Farmers are optimistic about the future, even as their perception of current economic conditions drops, according to a survey. Producer sentiment on current agricultural economic conditions fell 12 points in December, according to the Purdue University/CME Group Ag Economy Barometer. The Index of Current Conditions was 141, versus 153 in November. Meanwhile, the Index of Future Expectations was up 2 points in December to 155. The Ag Economy Barometer, encompassing results from both indexes and based on a midmonth survey of 400 US crop and livestock producers, dropped 3 points in December to 150, according to the survey. (firstname.lastname@example.org)
Corn Futures Could Be Main Beneficiary of WASDE Surprise -- Market Talk
09:17 ET - Corn yields and production for the 2019/20 growing season have room to travel lower, according to WASDE report estimates compiled by WSJ from analyst predictions. These analysts expect corn yields to drop by more than 1 bushel an acre to 165.9 bushels an acre on corn production of 13.49B bushels--which is down by nearly 200M bushels. A production drop is also expected for soybeans, but by only 30M bushels to 3.51B--with yields expected to only inch down 46.6 bushels an acre. The USDA is set to release the WASDE report at noon Friday. (email@example.com; @kirkmaltais)
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Grains Markets Wary of Trade Deal Promises -- Market Talk
11:27 ET - Claims made by US Chief Agricultural Negotiator Gregg Doud to an agricultural trade publication that China will be able to purchase $40B-worth of agricultural goods from the US this year are drawing some scrutiny from grains traders. "The markets will understandably remain skeptical, based on China's poor track record in keeping previously negotiated agreements," says Arlan Suderman of INTL FCStone. While fund rebalancing ahead of Friday's WASDE report is the main driver for movement Tuesday, a lack of concrete knowledge about the terms of a US-China deal is also dragging futures down. Soybeans are leading the way, dropping 0.5%. (firstname.lastname@example.org; @kirkmaltais)
Higher Oil From Iran Tensions Bad News for US Farmers -- Market Talk
10:13 ET - A conflict with Iran may cause a disruption in trade flows from the US to overseas trading partners, but lower export demand won't be the only issue affecting US farmers, says Chip Flory of Farm Journal. According to Flory, higher oil costs will also hurt the bottom line for US farmers. "Higher energy prices are going to make our inputs more expensive, not just fuel but all of the inputs more expensive," Flory said on his radio show AgriTalk. Oil prices have been relaxing after jumping roughly $2 per barrel in reaction to the US airstrike that killed a top Iranian general, but are still over $62 per barrel--a level last touched in September after an attack on Saudi Arabian oil facilities. (email@example.com; @kirkmaltais)
Cargill Earnings Surge on Asset Sales -- Market Talk
09:31 ET - Cargill reports a surge in quarterly earnings, boosted by sales of a malt business and financial subsidiary, along with higher earnings in its animal feed and meat unit as well as its financial and industrial unit. While the US-China trade war and a poor US growing season continued to weigh on Cargill's core grain business, the grain and meat merchant says F2Q adjusted operating earnings climbed 19% to $1.02B a share, and profits jumped 61% when factoring in the sale of CarVal Investors and the malt business. Revenue climbed 4% to $29.2B. (firstname.lastname@example.org; @jacobbunge)
Large Investors Pause Liquidation of Corn Short Positions -- Market Talk
09:03 ET - Managed money firms were trimming their short positions in corn through the latter half of last year, but that eased at year end -- with these large investors adding 6,935 short contracts and 8,537 long contracts through Dec. 31, the CFTC says in its Commitment of Traders report released after market close Monday. This leaves the funds with a net short position of roughly 80,000 contracts, according to the CFTC. Meanwhile, both wheat and soybeans are maintaining their ways of closing shorts in favor of longs, leaving traders with much thinner spreads between long and short positions. Grains on the CBOT are uniformly down premarket, led by wheat -- which is off 0.5%. (email@example.com; @kirkmaltais)
Archer Daniels Midland Acquires Yerbalatina Phytoactives >ADM
Archer Daniels Midland Co. (ADM) Tuesday said it has acquired Yerbalatina Phytoactives, a Brazilian maker of natural plant-based extracts and ingredients, for an undisclosed amount.
The Chicago agribusiness giant said Yerbalatina uses proprietary cool-drying technology to transform fruits, vegetables and other plants into extracts and ingredients for the food, beverage and health industries.
Hog Futures Finish Day Higher as Cutouts Show Mixed Result -- Market Talk
15:54 ET - Hog futures on the CME finished the day 0.9% higher at 69.225 cents a pound, reversing a steady decline of the futures contract since the start of the year. While the hog contract finished higher, pork cutouts showed a mixed finish, with pork belly finishing down $10.23 a hundredweight to $81.59. However, pork ribs and ham are higher, up $1.85 and $3.23 a cwt, respectively. Meanwhile, live cattle finished 0.6% lower, down to $1.26525 a pound. (firstname.lastname@example.org; @kirkmaltais)