3 Big Things Today, August 15

Beans, Grains Higher Overnight on Demand; Money Managers Raise Bets Against Corn.

1. Beans, Grains Higher Overnight as Demand Persists

Soybeans and grains rose overnight as traders shrugged off the U.S. Department of Agriculture’s forecast for record production and instead focused on demand.

Exporters sold another 258,000 metric tons of soybeans to China for delivery in the marketing year that starts on September 1, the USDA said in a report on Friday. That continues a streak in which more than 3.25 million metric tons of sales have been reported in the past two weeks.

Shippers sold 1.02 million tons of corn for delivery in the 2016-2017 marketing year for the week that ended on August 4, the USDA said.

Soybean futures for November delivery 17½¢ to $9.99¼ a bushel overnight on the Chicago Board of Trade. Soy meal futures for December delivery gained $4.90 to $332.70 a short ton, and soy oil rose 0.62¢ to 33.07¢ a pound.

Corn futures for December delivery gained 3½¢ to $3.36½ a bushel in Chicago.

Wheat futures for September delivery gained 3¾¢ to $4.26¼ a bushel in Chicago, while Kansas City wheat added ½¢ to $4.16¾ a bushel.

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2. Money Managers More Bearish Corn, Less Bullish Beans as Wet Weather Reigns

Money managers don’t seem to be as optimistic about corn and soybean prices, as the growing season makes its way through August.

Speculators increased their net-short position, or bets that prices will fall, in corn by 58% to 106,768 futures contracts in the week that ended on August 9, the U.S. Commodity Futures Trading Commission said in a report on Friday.

Investors also were less bullish on soybeans, lowering their net-long position, or bets that prices will rise, by 12% to 97,021 futures contracts, according to the CFTC.

As much as two or three times the normal amount of rain has fallen in parts of Iowa and Illinois (the two biggest producers of both corn and beans) in the past 30 days, according to the National Weather Service.

The weather’s been so good, in fact, that subsoil moisture in Iowa as of last week was rated 88% adequate or surplus, while in Illinois, a whopping 94% of subsoil moisture earned top ratings, according to the USDA. The agency will update its ratings today.

To be sure, dry spots still abound, mostly in the eastern Corn Belt. In Ohio, for example, no rain has fallen in some counties in the past month, and only 38% of the state has adequate or surplus subsoil moisture vs. 62% that’s rated short or very short.

Money managers, while becoming less enamored with corn and beans, are still keeping one eye on the sky to see how the weather shakes out.

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3. Flood Warnings Issued in Southern Illinois as Rain Continues

While the rainfall in parts of the Midwest may be good for crops, it’s becoming a bit too much in other areas.

Flash flood warnings have been issued for several counties in downstate Illinois, where as much as 3 inches of rain has fallen in the past three hours, according to the National Weather Service. The precipitation has inundated soil and has caused the closure of roads in the region, the NWS said. Central Indiana is also under a flash flood watch.

The flooding in Illinois comes on the heels of extremely wet weather in Louisiana that forced thousands to flee their homes. As much as 2 feet of rain fell in a 48-hour period, leaving homes underwater and killing at least three people, according to news reports.

Back in southern Illinois, storms will continue with another 2½ inches of rain expected through tonight, which could worsen flooding, the NWS said.

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