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3 Big Things Today, July 22

Soybeans, Grains Decline Overnight; Speculators' Bullish Bets on Corn Hit 14-Month High.

1. Soybeans, Grains Drop Overnight on Cooler U.S. Weather

Soybeans and grains were lower in overnight trading, as a heat wave that gripped two thirds of the country abates.

Last week’s heat wave, in which temperatures were in the upper 90s and heat indexes were close to 120˚F. in some areas, may have caused some damage to plants that had a shallow root system from being planted so late.

The hot weather has moved on and rainfall is expected in some parts of the Midwest, which should bring relief to crops.

U.S. cattle producers had 11.5 million head on feed as of July 1, a 2% increase year over year and the highest level for the date since 1996, according to the USDA.

While that’s good news, placements dropped 2% year on year. Net placements were reported at 1.69 million head in June, the USDA said.

Soybean futures for November delivery fell 5¢ to $9.14¼ a bushel overnight on the Chicago Board of Trade. Soy meal lost $1.50 to $316 a short ton, and soybean oil declined 0.09¢ to 28.47¢ a pound.

Corn futures for December delivery dropped 6¢ to $4.29¾ a bushel overnight.

Wheat for September delivery fell 6¼¢ to $4.96¼ a bushel, while Kansas City futures lost 3¾¢ to $4.36¼ a bushel.

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2. Money Managers Increase Their Net-Long Positions in Corn to 14-Month High

Net-long positions in corn futures rose to the highest level in almost 14 months, while investors reduced their bearish bets on soybeans.

Money managers held 178,732 net-long positions, or bets on higher prices, in corn futures in the seven days that ended on July 16, according to the Commodity Futures Trading Commission.

That’s up from the previous week’s net-long position of 174,318 contracts and the highest since the week that ended on May 29, 2018, CFTC data show.

Speculators reduced their net-short positions, or bets on lower prices, in soybeans to 42,481 contracts, down from 45,750 the prior week, the government said in a report.

Investors likely became more positive on crop futures last week, as a heat wave gripped much of the central U.S. last week, potentially harming crops.

In wheat, money managers reduced their net-short positions in hard red winter varieties to 17,190 futures contracts, down from 18,247 contracts the previous week.

Money managers held 15,087 net-long positions in soft red winter futures contracts, down from 27,583 contracts seven days earlier, the CFTC said.

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. Flash Flood Warning in Effect in Central Missouri Amid Rapid Rainfall Rates

Flash flood warnings are in effect for parts of central Missouri this morning, as up to 3 inches of rain fell overnight and more precipitation is on the way, according to the National Weather Service.

“Additional light to moderate rainfall will continue to occur across the warned area through the rest of the overnight hours,” the NWS said in a report early this morning. “Stream gauges are showing rises from the heavy rain that has occurred.”

In the Southern Plains, meanwhile, thunderstorms are possible mostly across the Oklahoma and Texas panhandles today.

Widespread severe weather isn’t expected, the NWS said. Still, rainfall in the region may further delay the hard red winter wheat harvest in the area.

Only 57% of the hard red winter wheat crop had been harvested as of July 14. The USDA will release its updated Crop Progress Report today showing how far along farmers are with crop collection.

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