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3 Big Things Today, January 13, 2020

Soybeans Lower in Overnight Trading; Money Managers Turn More Bearish Corn.

1. Soybeans Lower in Overnight Trading After WASDE

Soybeans were lower in overnight trading to start the new week as traders react to Friday’s World Agricultural Supply and Demand Estimates (WASDE) and grain stocks reports.

Production of soybeans in the U.S. in 2019 was pegged at 3.56 billion bushels, topping forecasts for 3.51 billion bushels and the previous month’s outlook for 3.55 billion bushels, according to the USDA.

Yield was seen at 47.4 bushels an acre, also topping trade expectations for 46.6 bushels an acre and the December estimate for 46.9 bushels an acre, the USDA said.

Corn production was forecast at 13.692 billion bushels, topping forecasts for 13.513 billion and the December estimate of 13.661 billion bushels. Yield was pegged at 168 bushels an acre compared with analyst projections of 166 bushels an acre and Decembers 167-bushel forecast.

Soybean futures for March delivery fell 5¢ to $9.41 a bushel overnight on the Chicago Board of Trade. Soy meal futures lost 30¢ to $303.20 a short ton, and soy oil declined 0.27¢ to 34.08¢ a pound.

Corn futures for March delivery fell ¼¢ to $3.85½ a bushel.

Wheat for March delivery fell 4¾¢ to $5.59¾ a bushel, while Kansas City futures lost 4¼¢ to $4.90½ a bushel.

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2. Money Managers Increase Net Shorts in Corn, Reduce Bearish Bets on Beans

Money managers increased their net-short positions, or bets on lower prices, on corn while cutting their bearish bets on soybeans, according to the Commodity Futures Trading Commission.

Speculators raised their net shorts in corn to 85,507 futures contracts in the first week of 2019, which ended on January 7. That’s up from 85,115 contracts a week earlier, the agency said in a report.

Investors were less bearish on soybeans last week, holding 2,851 net-short positions, government data show. That’s down from 7,524 such positions seven days earlier. Fund managers and hedgers likely were less bearish beans as the U.S. and China prepare to sign the so-called Phase One trade deal this week.

The agreement is scheduled to be signed on Wednesday, according to officials on both sides.

In wheat, money managers increased their bullish bets in hard red winter futures to 2,007 contacts, up from 319 futures contracts a week earlier, the CFTC said.

Investors held 22,261 net-long positions, or bets on higher prices, in soft red winter wheat last week, up slightly from 22,059 contracts seven days earlier, the agency 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. Freezing Rain, Snow Expected in Nebraska, Iowa; Drizzle, More Snow Forecast in Wisconsin

Freezing rain, snow, and patchy drizzle are expected in parts of eastern Nebraska and western Iowa today, according to the National Weather Service.

Some light freezing rain and snow are forecast into the midevening, along with snow, which mainly will fall over southwestern Iowa, the NWS said in a report early this morning.

Patchy drizzle expected in the region this afternoon could freeze as temperatures decline. Fog also may be present near the Nebraska-Kansas border, which will cut visibility to less than ½ mile and along with ice on roads may lead to dangerous travel conditions.

In Wisconsin, meanwhile, light snow is moving out of the state but will be followed by a round of freezing drizzle.

Snow-covered roads will be slippery this morning, the NWS said.

More snow is expected in southern Wisconsin this week due to an active weather pattern, the agency said in its report.

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