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3 Big Things Today, May 8

Soybeans, Wheat Lower Overnight; Money Managers Reduce Bets on Lower Prices.

1. Soybean Futures Lower Overnight as Growers Look at Increasing Acreage

Soybeans were lower in overnight trading on speculation that growers will curb corn planting and increase soybean seeding due to excessive rainfall in parts of the Midwest.

Incessant precipitation the past few weeks has kept growers out of fields, and some of those who managed to get their corn planted have said they’ll have to replant due to flooding.

As much as six times the normal amount of rain has fallen in parts of Illinois and Indiana in the past two weeks, according to the National Weather Service. Soybeans are planted after corn, so if growers can’t get their grain in the ground, some likely will switch to beans.

Soybean futures for July delivery fell 3¼¢ to $9.69¾ a bushel overnight on the Chicago Board of Trade. Soy meal lost $1.60 to $315.30 per short ton, and soy oil gained 0.16¢ to 33.06¢ a pound.

Corn futures for July delivery lost 1¾¢ to $3.69 a bushel.

Wheat futures for July delivery lost 4¢ to $4.38¼ a bushel, and Kansas City wheat declined 2¼¢ to $4.47¾ a bushel overnight.


2. Speculative Investors Reduce Net-Shorts in Corn, Beans, Now Bullish HRW Wheat

Money managers reduced their bets for lower agricultural commodity prices across the board and even were net-long hard-red winter wheat contracts last week.

Speculative investors were net-short by 51,483 soybean contracts in the week that ended May 2, down from 52,475 contract the week prior, according to the U.S. Commodity Futures Trading Commission.  

They reduced their net-shorts in corn to 170,603 contracts, down from 180,360 the previous week, the CFTC said in a report.

Bets on lower soft-red winter wheat prices fell dramatically to 123,214 contracts vs. 171,269 just seven days earlier. Investors were net-long, or are now betting on higher prices, in hard-red winter wheat by 294 contracts against a net-short position of 17,616 a week earlier, according to the CFTC.

Investors were less bearish on corn and beans as incessant rain threatens yield and production in the U.S. Midwest.

They were net-long, or bet on higher prices, for hard-red winter wheat due to a snowstorm the last weekend of April that caused headed stems to snap and plants to be buried, likely cutting output.

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 that futures will decline.

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3. More Rainfall on Way For Parts of Midwest This Week, NWS Says

More rain is on the way for parts of the Midwest this week as storms move out of the northern Plains.

“Storms across the northern Plains will shift eastward into the middle Mississippi Valley and the Ohio Valley the next few days,” the National Weather Service said in a report early Monday. “Expect the most organized activity to be along a frontal boundary that stalls across the Ohio Valley on Tuesday and into Wednesday. Moderate to heavy rainfall and localized flash flooding may be possible.”

As if things weren’t bad enough in the eastern Midwest, a widespread freeze warning has been issued for the eastern half of Wisconsin, all of Michigan, and several counties in Indiana and Ohio, according to weather maps.

Temperatures are expected to fall below freezing early this morning, which could hurt “sensitive vegetation,” the NWS said. The good news is the temperatures are not expected to fall so low that they’d hurt row crops, according to the agency.     

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