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3 Big Things Today, September 30

Wheat Futures Again Higher Overnight; Money Managers Reduce Bearish Bets on Corn, Beans.

1. Wheat Rises as Adverse Weather Threatens Spring Crop; Soybeans Jump

Wheat futures were again higher in overnight trading as adverse weather threatens the spring crop in North Dakota and Canada. Soybeans also were higher while corn was little changed.

Cold, rainy weather in much of the U.S. Northern Plains and Canadian Prairies is causing concerns about the size and quality of this year’s spring wheat crop.

About 87% of the U.S. spring wheat crop was harvested as of September 22, down from the prior five-year average of 97% for this time of year, according to the USDA. In North Dakota, the biggest producer of the variety, 85% had been collected, behind the normal 95%.

The USDA will release its updated weekly Crop Progress Report this morning.

In Canada, less than 50% of the crop has been harvested, and snow has fallen in many growing areas, according to analyst reports. That could further shrink the size of the global spring wheat crop.

Dry weather in Australia also is keeping prices elevated.

Wheat for September delivery rose 3¢ to $4.90¼ a bushel overnight on the Chicago Board of Trade, while Kansas City futures added 3¢ to $4.10½ a bushel.

Soybean futures for November delivery jumped 8¢ to $8.91 a bushel overnight. Soy meal rose $1.90 to $297 a short ton, while soybean oil gained 0.11¢ to 28.95¢ a pound.

Corn futures for December delivery rose ¾¢ to $3.72¼ a bushel.

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2. Speculative Investors Cut Their Bearish Bets in Corn, Beans, Hard Red Winter Wheat

Money managers reduced their net-short positions, or bets on lower prices, in both corn and soybeans in the seven days that ended on September 24, according to the Commodity Futures Trading Commission.

Investors held a net-short position of 162,551 corn futures contracts as of last week, down from 176,643 futures contracts seven days earlier, which was the biggest such position since May 14, the CFTC said in a report.

Speculators also held a net-short position of 43,053 soybean futures contracts as of September 24, down from 45,612 contracts a week earlier and the smallest level since the seven days that ended on July 23, government data show.

Investors likely reduced their bearish bets on corn and soybeans on speculation that yield and production of both crops, which were planted late, will come in below expectations. Adverse weather for much of the growing season has led some to believe that the crop will be smaller than forecast by the government.

In wheat, money managers reduced their bearish bets in hard red winter futures contracts slightly to 36,803 last week. That’s down from 37,605 futures contracts the previous week.

Speculators, however, increased their net-short positions in soft red winter wheat to 15,418 futures contracts, up from 7,093 futures contracts a week 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. Thunderstorm Warning in Effect in North Dakota, Minnesota; Flooding Forecast in Nebraska, Iowa

A severe thunderstorm watch is in effect for much of eastern North Dakota and western Minnesota, while flash flood warnings are in effect from north-central Kansas into northern Iowa.

In North Dakota and Minnesota, heavy rain is expected today in areas where the ground is already saturated, according to the National Weather Service. Large hail up to the size of a quarter and gusty winds, along with the precipitation, are the main threats.

In Nebraska and Iowa, meanwhile, a flash flood watch has been issued as a slow-moving weather front will bring heavy precipitation that could lead to flooding in the region, the NWS said in a report earlier this morning.

Rainfall amounts are forecast from 3 to 5 inches in parts of the area with up to 2 inches possible in portions of the region.

Counties along the Missouri River between the states and several in northwest Missouri are under a flood warning as the river continues to top flood stages, government data show.  

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