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3 Big Things, September 9, 2019
1. Ag Markets Trade Lower, As Bears Tighten Their Grip
In overnight trading, December corn futures are ¼¢ lower at $3.55; March futures are unchanged at $3.68.
November soybean futures are 2¢ lower at $8.55¾; January soybean futures are 2¢ lower at $8.70.
December wheat futures are 2¾¢ lower at $4.61.
In the outside markets, the NYMEX crude oil market is 37¢ higher, the U.S. dollar is higher, and the Dow Jones Industrials are 105 points higher.
Al Kluis, Kluis Advisors, says the bulls in the marketplace simply cannot gain any momentum. “Last week, we tried to rally a couple of cents a few days. However, once the markets failed to hold the momentum, the bears took over. Last Friday, we saw the funds be big sellers. They simply are not worried that the U.S. crop will not make it,” Kluis told customers in daily note.
Kluis added, “Keep a close eye on the headlines coming out of Washington relating to the U.S.-China trade war. With both sides coming back to the negotiating table, there seems to be a little more optimism about a deal being struck this time.
2. The Funds Get Even Shorter The Corn Market
As the funds continue to get more bearish on the corn market, producers and merchants cut their net short positions vs. a week ago, according to Friday’s Commitments of Traders Report.
In its report, the Commodities Futures Trading Commission stated that managed money funds added 23,242 corn short position while cutting long positions by 4,188. This now makes this investment group net short the corn market by 123,800 contracts vs. short 96,370 contracts a week ago.
Managed money funds added 2,321 long contracts in the soybean market, while cutting 1,672 short positions. In all, this investment group is now net short the soybean market by 71,558 contracts vs. 75,551 a week ago.
On Friday, the COT Report shows that producers cut their corn long positions by 43,163 contracts while cutting corn short contracts by 69,407. This group of investors is now net short the corn market by 245,477 contracts vs. 271,721 a week ago.
For soybeans, producers added 2,940 long contracts to their position while adding 11,044 short contracts. The producer, merchants remain net short by 36,271 contracts vs. 28,167 a week ago.
3. Continued Rains Seen This Week For Midwest
David Tolleris of WxRisk.com says the temps this weekend were cool in the central and northern Corn Belt.
“This weekend had mostly cooler temps in the Upper Midwest and warm temps in the deep South. Rains moved across the Dakotas into Minnesota and Wisconsin, bringing 1 to 3 inches of moisture to those areas with 60% to 70% coverage. The ridge continues to stay over the deep south, bringing those folks a lot of hot and dry conditions,” Tolleris stated in a daily note to customers.
This week we will see continued rains across the Dakotas, Minnesota, Wisconsin, and northern Iowa, while the Midwest will be very seasonal. The deep south will continue to remain dry and hot until late in the week, Tolleris says.
“The week's two models suggest patterns will change. The eastern Corn Belt, east of the Mississippi River, will actually warm up to bring those folks some much-needed extra growing degree units to help finish off the crop. The western Corn Belt and the Upper Midwest will also warm up some, but not as much as the eastern Corn Belt,” Tolleris told customers in a daily note.