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173069

3 Big Things Today, October 17

Soybeans, Corn Rise in Overnight Trading; Money Managers Bullish Amid Strong Demand

1. Soybeans, Corn Higher Overnight as Demand Stays Strong

Soybean and corn futures were higher overnight on optimism about demand for U.S. supplies.

Exporters sold 1.42 million metric tons of soybeans in the week that ended October 6, the Department of Agriculture said in a report. China was the biggest buyer, taking 795,800 tons of the total, according to the USDA.

Corn sales totaled 873,400 tons, and while that’s well below the prior week, it’s still quite strong. South Korea, Japan, and Mexico were all buyers of U.S. corn. Wheat sales came in at 491,000 tons, up 30% from the prior week, the government said.

Soybeans for November delivery rose 8¾ cents to $9.71¼ a bushel on the Chicago Board of Trade. Soy meal futures for December delivery added $1.60 to $302.20 a short ton and soy oil gained 0.63¢ to 35.01¢ a pound.

Corn futures for December delivery gained 2¼ cents to $3.56½ a bushel in Chicago.

Wheat futures for December delivery rose 1¾ cents to $4.22¾ a bushel in Chicago, while Kansas City futures added ¾¢ to $4.18½ a bushel. 

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2. Money Managers More Bullish on Beans, Corn Amid Strong Demand

Speculative investors last week were more bullish, or in some cases less bearish, on U.S. soybean and corn futures as strong demand is expected to buoy prices.

Money managers increased their net-long positions, or bets that prices would rise, to 68,789 soybean futures contracts in the week that ended October 11, up from 61,991 contracts a week earlier, the Commodity Futures Trading Commission said in a report.

For corn, speculators lowered their net-short positions, or bets that prices would fall, to 121,914 corn futures contracts, down from 153,096 seven days earlier, the lowest level since the last week of July, according to the CFTC. That’s good news for growers and exporters alike.

Prices have recently been underpinned by strong demand for U.S. supplies. Corn sales to overseas buyers since the start of the marketing year on September 1 totaled 21.5 million metric tons, 85% ahead of last year’s pace, according to the U.S. Department of Agriculture. Soybean sales are at 29.7 million tons, 28% ahead of the same pace in 2015. Wheat sales are 26% ahead of last year’s pace.

Relatively low prices for all three commodities have been driving demand.

Actual shipments of corn since the start of September have been reported at 6.69 million metric tons, up 77% from the same time frame last year. Exports of soybeans are up 31% to 5 million tons, and wheat shipments of wheat have jumped 26% to 10.1 million tons, according to the USDA.

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3. Dry Weather Leads to Wildfire Danger After Months of Excessive Rainfall  

The Midwest for much of the past few months couldn’t get away from the excessive rainfall that flooded fields and led to fungal diseases in crops. Now, it’s the opposite.

So-called red-flag warnings have been issued for much of the western Midwest, indicating that conditions are overly dry and the risk of fire is elevated, according to the National Weather Service. Most of western Nebraska, Kansas, Oklahoma, and the Texas panhandle is all under a red-flag warning, NWS data show.

Iowa and Illinois aren’t included in that warning, but the NWS said tinderbox conditions exist, and wildfires are a risk.

“There is an elevated fire weather risk in crop fields due to very warm and breezy conditions with gusts of 30 to over 35 mph,” the agency said. “If wildfires were to ignite crop fields, they would spread rapidly. The greatest risk is unharvested fields south of I-80.”

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