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3 Big Things Today, October 21, 2019

Grains, Soybeans Higher Overnight; Investors Raise Bullish Bean Bets to 16-Month High.

1. Grains, Beans Higher Overnight on More Wet Weather

Grains and soybeans were higher in overnight trading amid ongoing adverse weather that likely will delay the harvest in some areas.

Some rain is expected in the central and Upper Midwest today and tonight, which could further delay the harvest in some areas. Parts of Nebraska and Iowa could see rain as could some areas in South Dakota and Minnesota.

Only 22% of the U.S. corn crop was harvested as of October 13, well behind the normal pace of 36% for that week, according to the USDA. The agency is scheduled to update its Weekly Crop Progress Report this morning.

In Iowa, only 7% was harvested as of last week, down from the prior five-year average of 20%, the USDA said. Five percent was collected in Minnesota, missing the average of 19% for this time of year.

Some 26% of soybeans were collected as of last week, missing the previous average of 49%. About 17% of Iowa soybeans were in the bin vs. the normal 43%. In Minnesota, 19% of the crop was harvested compared with the average of 62% for this time of year, the USDA said.

More wet weather will only further delay the harvest.

Corn futures for December delivery rose 1¢ to $3.92 a bushel overnight on the Chicago Board of Trade.

Wheat for September delivery added 1½¢ to $5.33¾ a bushel, while Kansas City futures gained 2¼¢ to $4.36 a bushel.

Soybean futures for November delivery rose 5¢ to $9.39 a bushel overnight. Soy meal gained $1.90 to $310.40 a short ton, while soybean oil was up 0.05¢ to 30.41¢ a pound.

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2. Speculative Investors Raise Bullish Bets on Soybeans to Highest Level in 16 Months

Money managers raised their net-long positions, or bets on higher prices, to the highest level in 16 months last week amid low expectations for this year’s crop.

Investors held a net-long position of 47,953 soybean futures contracts as of October 15, according to the Commodity Futures Trading Commission.

That’s up from 4,464 futures contracts a week earlier and the largest long position since June 5, 2018, CFTC data show.

Speculators reduced their net-short positions, or bets on lower prices, in corn to 64,749 futures contracts last week. That’s down from 96,859 contracts a week earlier and the smallest bearish position since the week that ended on August 13, the government said in a report.

Wet, cold, and snowy weather during harvest after extremely rainy weather that delayed planting has led to expectations for smaller year-over-year yield and production.

Investors also reduced their bearish bets in hard red winter wheat, pushing their net-short positions to 24,742 futures contracts. That’s down from 35,960 contracts a week earlier and the smallest such position since August 6, the CFTC said.

Money managers also held 3,662 net-short positions in soft red winter wheat futures, down from 13,446 contracts the prior week and the smallest bearish position since August 25, the government 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. More Rain Forecast in Parts of Iowa, Minnesota, Nebraska, South Dakota

More rain is on the way for producers trying to get their crops harvested in parts of Iowa, Minnesota, Nebraska, and South Dakota, according to the National Weather Service.

Scattered showers are expected in parts of northwestern Iowa, southwestern Minnesota, northeastern Nebraska, and southeastern South Dakota – roughly where the four states meet. Severe weather, however, isn’t expected.

Strong winds, however, are forecast with gusts of up to 55 mph, the NWS said in a report early this morning.

In Arkansas, meanwhile, a severe thunderstorm warning is in effect, as strong storms rumble through the area.

Winds overnight were strong with gusts of a much as 60 mph. Tornado watches also are in effect in the eastern part of the state. The storm producing the winds is moving east at about 50 mph, the NWS said.

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