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3 Big Things Today, February 3, 2020

Grains, Beans Lower in Overnight Trading; Investors Raise Bearish Bets on Soybeans.

1. Grains, Soybeans Lower in Overnight Trading Monday

Grains and soybeans were lower in overnight trading on continued concerns about the spreading coronavirus.

China now has more than 17,200 confirmed cases of the disease and 361 deaths. The total includes one death in the Philippines, the first confirmed the virus outside of China, according to the World Health Organization.

Eleven cases have now been confirmed in the U.S. All flights from China are being routed to one of 11 airports in the U.S., where passengers are screened before being allowed entry.

Hong Kong has closed its borders with China, and Japan and South Korea saw a large increase in the number of confirmed cases over the weekend.

Global markets have been hit as equity and commodity markets have dropped since the start of the outbreak. Among the biggest concerns is how the spread of the disease will affect demand for items such as soybeans.

China is the world’s largest importer of soybeans.

Corn futures for March delivery fell 1¾¢ to $3.79½ a bushel overnight on the Chicago Board of Trade.

Wheat futures for March delivery lost 4½¢ to $5.49¼ a bushel, while Kansas City futures dropped 3¼¢ to $4.61¼ a bushel.

Soybean futures for March delivery declined 1¢ to $8.71½ a bushel overnight. Soy meal futures lost 80¢ to $290.20 a short ton, and soy oil fell 0.01¢ to 29.93¢ a pound.

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2. Money Managers Bump Bearish Bets on Beans to Highest Level in Six Weeks

Money managers raised their net-short position, or bets on lower prices, on soybeans to the highest level in almost six weeks while becoming less bearish on corn, according to the Commodity Futures Trading Commission.

Fund managers held a net-short position of 55,446 soybean futures contracts as of January 28, up from 19,341 contracts a week earlier, the CFTC said in a report. That’s  the largest such position since December 17.

Investors likely were more bearish on soybeans on concerns about the impact on demand due to the spread of the coronavirus throughout China, the world’s largest importer of the oilseeds.

Speculators, however, decreased their bearish bets on corn, reducing their net shorts to 25,390 futures contracts. That’s down from 65,890 contracts a week earlier and the smallest such position since the seven days that ended on August 13, government data show.

Demand for corn has been strong in recent weeks. Exporters sold 1.23 million metric tons of the grain in the week that ended on January 23, a 23% increase from the previous week and a 99% jump from the prior four-week average, according to the USDA.

Money managers also increased their bullish bets on soft red winter wheat to a net-long position of 41,817 futures contracts last week. That’s up from 39,286 contacts a week earlier.

Investors slightly reduced their net-long positions, or bets on higher prices, on hard red winter futures to 8,785 contracts from 9,617 the previous week, the CFTC said in its report.

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. Winter Storm Warning in Effect For Much of Wyoming, Advisories Issued in Kansas, Nebraska

Winter weather is slamming much of Wyoming, Colorado, western Nebraska, and northern Kansas, according to the National Weather Service.

A winter storm warning is in effect for much of Wyoming this morning as snow and freezing drizzle are expected, the NWS said in a report early this morning.

As much as 10 inches of snow are expected in lower elevations with up to 20 inches forecast in the Snowy Range, the agency said.

In western Nebraska, a winter weather advisory is in effect starting at 5 p.m. today as 2 inches of snow are forecast.

A winter weather advisory also is in effect for much of northern Kansas and eastern Nebraska with freezing drizzle and strong winds expected. Wind gusts of up to 40 mph are expected throughout much of the day, the NWS said.

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