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3 Big Things Today, May 15

Wheat Futures Lower in Overnight Trading; Money Managers Push Bets on Lower Corn Prices.

1. Wheat Futures Drop as Traders Bet Snow Damage Not as Bad as Feared

Wheat futures were lower overnight on speculation by traders that the damage from a winter storm the last weekend of April wasn’t as bad as feared.

As much as 2 feet of snow fell in parts of western Kansas on April 29-30, burying some fields and snapping stems in other fields. The snow was very heavy, analysts said, and that likely curbed yields and production.

Participants on the Kansas Wheat Tour, which went through the state the week after the snowfall, pegged yields at about 5 bushels per acre below official estimates due to the damage.

Still, no official word of how much damage was done has surfaced thus far, and it usually takes a couple weeks to assess the harm caused by such a weather event. That’s leaving traders wondering exactly how much damage was done.

Wheat for July delivery fell 4¢ to $4.28¾ a bushel overnight on the Chicago Board of Trade. Kansas futures declined 5¼¢ to $4.34 a bushel.

Soybean futures for July delivery rose 1½¢ to $9.64½ a bushel in Chicago. Soy meal rose 2¢ to $313.50 a short ton, and soy oil futures rose 0.15¢ to 32.99¢ a pound.

Corn futures lost a penny to $3.70 a bushel in overnight trading.


2. Speculative Investors Push Net-Shorts in Corn to 15-Month High

Money managers held the biggest net-short position in corn in 15 months amid prospects for rising global production.

Speculative investors held 203,976 net-short positions in corn in the week that ended on May 9, the largest such position since March 2016 and up from 170,603 contracts a week earlier, according to the Commodity Futures Trading Commission.

Corn yields globally have grown with Brazil statistics agency Conab raising its outlook for domestic production to 92.8 million metric tons from 91.5 million.

Soybean investors, on the other hand, lowered their net-short positions, or bets against higher prices, to the lowest level in a month.

Speculators were net-short by 38,353 contracts, the smallest such position since April 11.

Money managers raised their bets on hard red winter wheat to the highest level since March on concerns about the health of the crop after a late-April winter storm. Investors were net-long by 13,082 contracts last week, up from 294 the prior week, according to the CFTC.

Soft red winter wheat investors lowered their bets against higher prices to 113,819 contracts from 123,214 seven days earlier, the agency said. That’s the smallest net-short position since March 14.

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. Rainfall, Damaging Storms Expected This Week in Northern, Southern Plains

Some parts of the U.S. were drier, which may have allowed growers into fields after weeks of nonstop rain, but another round of storms is on the way.

Showers and thunderstorms with heavy rain are expected in a long stretch of land from the Northern Plains to the upper Great Lakes regions, according to the National Weather Service.

Storms that contain hail and “damaging wind gusts” are possible in the Southern Plains from West Texas north into Kansas, the NWS said in an early report on Monday.

Flooding is still a problem along the Mississippi River Valley and on smaller rivers and tributaries in much of Illinois, Indiana, Michigan, and Ohio, weather maps show.

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