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3 Big Things Today, August 19

Soybeans, Grains Lower Overnight; Money Managers Cut Bullish Bets on Corn Futures.

1. Soybeans, Grains Lower Overnight on Acreage Concerns, Weather

Soybeans and grains were lower in overnight trading amid continued concerns about last week’s World Agricultural Supply and Demand Estimates (WASDE) Report and the ongoing trade war with China.

The USDA last week said growers planted 90 million acres with corn, topping consensus compiled by Reuters for 88 million. Yield was seen at 169.5 bushels an acre, well ahead of forecasts for 164.9 bushel, which put production at 13.9 billion bushels, also topping expectations for 13.2 billion bushels.

Some analysts believe the USDA overshot its report and believe the corn acreage figure will come in well below the agency’s forecast.

Soybean acreage was seen at 76.7 million, the USDA said. Yield is expected at 48.5 bushels an acre, resulting in production of 3.68 billion bushels, down from the previous outlook for 3.845 billion.

Rainfall last week and over the weekend in the Mississippi Valley along with some precipitation in parts of the central Corn Belt gave crops a much-needed drink of water, which also could be weighing on prices.

As always, traders, analysts and producers all have eyes on the trade war with China.

Soybean futures for November delivery fell 6½¢ to $8.73¼ a bushel overnight on the Chicago Board of Trade. Soy meal lost $2.20 to $298.10 a short ton, while soybean oil dropped 0.14¢ to 29.37¢ a pound.

Corn futures for December delivery declined 6¢ to $3.74¾ a bushel.

Wheat for September delivery lost 3¢ to $4.74½ a bushel, while Kansas City futures dropped 2½¢ to $4.07 a bushel.

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2. Money Managers Cut Bullish Bets on Corn to Lowest Level Since Late May

Money managers cut their net-long positions, or bets on higher prices, in corn to the lowest level in almost three months while reducing their bearish bets in soybeans.

Investors were net long by 21,527 corn futures contracts as of August 13, according to the Commodity Futures Trading Commission. That’s the smallest bullish position for corn futures since the seven days that ended on May 28.

Speculators, however, reduced their net-short position, or bets on lower prices, in soybean futures last week, the CFTC said in a report.

They held a net-bearish position of 67,203 futures contracts in soybeans, down from 76,318 contracts the previous week, the agency said.

Investors had been more bearish on soybeans leading up to last week amid concerns about the seemingly never-ending trade war with China that’s eroding export markets and mostly benign weather in the Midwest.

Dry weather in some parts of the Corn Belt and an about-face by President Donald Trump on trade may have led to increased bullish sentiment on soybeans. The president said last week that tariffs on an additional $300 billion worth of Chinese goods that was expected to go into effect on September 1 would instead be put on hold until December 15.

In wheat, money managers increased their net-short positions in hard red winter futures to 36,435 contracts from 22,942 the previous week. That’s the largest bearish position since May 28.

Investors held only 4,000 net-long positions in soft red winter wheat futures as of August 13, down from 7,121 contracts seven days earlier and the smallest such position since June 4, according to the CFTC.

The weekly Commitment of Traders Report from the Commodity Futures Trading Commission shows trader positions in futures markets.

The report provides positions held by commercial traders, or those using futures to hedge their physical assets; noncommercial traders, or money managers (also called large speculators); and nonreportables, or small speculators.

A net-long position indicates more traders are betting on higher prices, while a net-short position means more are betting futures will decline.

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3. Heat Wave Again Hitting Parts of Southern Midwest, Plains With Indexes at 115˚F. 

Another heat wave is hitting much of the southern Midwest and Plains with excessive heat warnings and heat advisories now in effect over parts of Kansas, Oklahoma, Missouri, and Arkansas.

The eastern half of Oklahoma is under an excessive heat warning as “very dangerous” weather is expected, according to the National Weather Service.

Indexes are expected to reach as high as 115˚F. today in some parts of the state and in some counties in western Arkansas, the NWS said in a report early this morning.

“The combination of hot temperatures and high humidity will combine to create a dangerous situation in which heat illnesses are possible,” the agency said.

In eastern Kansas and pretty much all of the western half of Missouri, heat indexes are pegged as high as 110˚F. Outdoor activity should be limited, the NWS said.

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