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3 Big Things Today, May 28

Corn, Soybeans Higher Overnight; Money Managers Reduce Bearish Bets on Grains, Beans.

1. Grains, Beans Move Higher as Wet Weather Persists

Corn and soybeans surged overnight after the long weekend as precipitation continues to hammer the central U.S.

As much as 5 inches of rain fell in parts of Nebraska and northern Kansas yesterday, while central South Dakota saw up to 4 inches of precipitation, according to the National Weather Service.

Six times the normal amount of rain has fallen in much of the Midwest, Northern Plains, and Southern Plains in the past 14 days, the NWS said. As of May 19, only 49% of U.S. corn was planted vs. the normal 80% for this time of year, according to the USDA.

In Illinois, only 24% was seeded, well behind the average of 89% for the week; in Indiana, 14% was in the ground compared with the normal 73%, the USDA said. The agency will release its Weekly Crop Progress Report today, a day late due to Memorial Day.

Nineteen percent had emerged vs. the average of 49% for this time of year.

Soybean seeding was only 19% complete, well behind the average of 47% for this time of year, the USDA said. About 5% of the crop had emerged, compared with the normal 17%.

Corn futures for May delivery jumped 9¾¢ to $4.14 a bushel overnight on the Chicago Board of Trade.

Soybeans for May delivery added 13½¢ to $8.43 a bushel. Soy meal rose $3.90 to $304.40 a short ton, and soy oil gained 0.33¢ to 27.34¢ a pound.

Wheat for May delivery was up 13¢ to $5.02½ a bushel in Chicago, while Kansas City wheat gained 15¢ to $4.57 a bushel.


2. Speculators Push Corn Net-Short Positions to Four-Month Low, Reduce Bearish Bets in Beans

Money managers lowered their net-short positions, or bets on lower price, on corn futures to the lowest level in almost four months last week, according to the Commodity Futures Trading Commission.

Investors were net short by 117,954 corn futures contracts as of May 21, down from 298,551 futures contracts the previous week and the lowest since the seven days that ended on January 26, the CFTC said in a report.

Speculators also lowered their bearish outlook on soybeans, pushing their net-short positions to 157,998 contracts as of last week. That’s down from 171,141 futures contracts the previous week and the lowest level since April 30, government data show.

Large funds and other money managers have become less bearish on corn and beans as wet weather continues to inundate the central U.S., keeping planters out of fields and slowing the rate of emergence for both crops.

In wheat, investors slashed their net-short positions in soft red winter futures contracts to the lowest level in more than three months.

Money managers held 40,159 such positions in soft red futures as of May 21, the smallest amount since the seven days that ended on February 12, the CFTC said.

Investors also cut their bearish positions in hard red winter wheat, pushing their net shorts to 49,136 futures contracts from 57,198 contracts the previous week, which is the lowest level since April 9, according to the government.

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.


3. Thunderstorms Already Hitting Parts of Nebraska, Iowa, Headed Toward Illinois

There’s an “enhanced” risk for thunderstorms in the central U.S. today that could bring tornadoes and flash flooding, according to the National Weather Service.

A severe thunderstorm warning is in effect for counties in eastern Nebraska and western Iowa as a storm moves through the area this morning. Wind damage was expected as winds reached up to 60 mph, the NWS said in a report at about 5:30 a.m.

As much as 2 inches of rain fell overnight, which likely will cause some flooding in the area.

In eastern Iowa and western Illinois, flood warnings are still in effect in many areas, while a flood watch has been issued for wide chunk of the region, the agency said.

Thunderstorms that will bring heavy rain are expected today, and the threat of storms and precipitation will spread to all of eastern Iowa and northwestern Illinois.

“With most of the area saturated from heavy rainfall over the past week, flash flooding will be possible with thunderstorms,” the NWS said.

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