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3 Big Things Today, October 7, 2019

Grains, Soybeans Little Changed Overnight; Money Managers Slash Bearish Bean Bets.

1. Grains, Beans Little Changed as Investors Weigh Trade War Vs. Slow Crop Maturity

Grains and soybeans were little changed in overnight trading as there was no movement on the trade front over the weekend.

Bloomberg News reported that government officials from China are hesitating on a long-term trade deal with the U.S. ahead of this week’s talks. Negotiations in Washington are expected to start Thursday.

Chinese Vice Premier Liu He, who is the lead negotiator for the Asian nation, reportedly told officials that any offer to the U.S. will not include reforming industrial policy or government subsidies, which are among the most sought-after items on President Donald Trump’s list of demands.

Economists, meanwhile, are predicting a sharp slowdown in U.S. economic growth due to the trade war with China that’s dragged on for more than 15 months and has no end in sight.

Buoying crop prices, however, is the slow pace of maturity and potential for adverse weather.

Only 43% of the U.S. corn crop was mature as of September 30, well behind the normal 73% for this time of year, while 11% was harvested, behind the average pace of 19%, according to the USDA.

Fifty-five percent of soybeans were dropping leaves at the start of last week, behind the average of 76%, while only 7% were harvested, about a third of the normal pace, the USDA said in a report.

The agency will release its weekly Crop Progress Report this morning.

Corn futures for December delivery rose ¾¢ to $3.85½ a bushel overnight on the Chicago Board of Trade.

Wheat for September delivery fell ¾¢ to $4.89¾ a bushel, while Kansas City futures declined ½¢ to $4.03½ a bushel.

Soybean futures for November delivery dropped ½¢ to $9.15¾ a bushel overnight. Soy meal lost $1.40 to $302.30 a short ton, while soybean oil gained 0.02¢ to 29.88¢ a pound.

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2. Money Managers Cut Net-Short Positions in Soybeans to Lowest in Eight Months

Money managers cut their net-short positions, or bets on lower prices, on soybeans to lowest level in almost eight months while also curbing bearish bets on corn.

Investors as of October 1 held 10,817 net-short positions in soybean futures, according to the Commodity Futures Trading Commission.

That’s down from 43,053 such positions the previous week and the lowest since the seven days that ended on February 12, the CFTC said in a report.

Speculators last week held a net 128,031 corn futures contracts, down from 162,551 contracts a week earlier and the smallest amount since September 3, government data show.

Investors may have cut their bearish bets on soybeans and corn, as reports indicate yield and production may be worse than forecast by the USDA and private analysts. Excessive rain throughout the year and cold weather that’s hit parts of the Corn Belt likely will curb the size of both crops.

In wheat, money managers increased their net-short positions in soft red winter futures to 16,014 futures contracts, up from 15,418 contracts the previous week. That’s the largest such position since the seven days that ended on September 3.

Speculators reduced their net-short positions in hard red winter wheat futures to 33,674 contracts last week, down from 36,803 contracts a week earlier. That would be the smallest such position since August 6, according to the CFTC.

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. Frost Advisories in Effect For Parts of Nebraska, Southern Plains; Iowa Rivers Still Flooding

Frost advisories are in effect for much of central Nebraska, western Kansas, and eastern Colorado this morning along with a few counties in the Oklahoma and Texas panhandles, according to the National Weather Service.

In central Nebraska, temperatures fell as low as 30˚F. overnight, the NWS said in a report early this morning. The advisory is in effect until 9 a.m. CDT, the agency said.

Temperatures in the Southern Plains, including parts of southwestern Kansas and the Oklahoma and Texas panhandles, fell into the mid-30s overnight, which isn’t low enough to damage recently planted hard red winter wheat.

Still, the cold weather will hang around with snow possible later in the week. No accumulations are expected, the NWS said in its report.

Farther east, some rivers in eastern Iowa and western Illinois continue to overrun their banks, flooding low-lying areas.

No rain is expected until later this week, when a storm front moves through Thursday and Friday, bringing moderate to heavy rain to the area, the agency said.

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