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3 Big Things Today, August 10, 2020

Soybeans Slightly Lower Overnight; Investors Turn More Bearish on Corn.

1. Soybean Futures Down Modestly in Overnight Trading

Soybeans were slightly lower in overnight trading as rainfall is expected in parts of Iowa that have been dry for the past month.

Thunderstorms are forecast in much of west-central Iowa, the National Weather Service said, an area that is suffering from severe and extreme drought conditions. Under those conditions, crop losses are imminent.

As much as 2 inches of rain have fallen in the area in the past few days, the NWS said, bringing much-needed relief to the region.

“Thunderstorms are forecast today as a cool front moves across (Iowa),” the agency said. “A few storms could be severe with damaging winds and large hail the primary threats. Periodic thunderstorm chances continue through the second half of the week, however, at this time the severe threat is uncertain.”

Ample rain has fallen in much of the Corn Belt in recent weeks, giving crops a boost.

The U.S. corn crop was 72% good or excellent at the start of last week, according to the U.S. Department of Agriculture. About 73% of the soybean crop earned top ratings.

The USDA will release its weekly crop progress report today.

Soybean futures for December delivery fell 1¾¢ to $8.65¾ a bushel overnight on the Chicago Board of Trade. Soymeal lost 30¢ to $286.50 a short ton, and soy oil dropped 0.19¢ to 30.56¢ a pound.

Corn futures for December delivery were unchanged at $3.20¾ a bushel.

Wheat futures for September delivery lost 2½¢ to $4.93 a bushel overnight while Kansas City futures fell 2½¢ to $4.13 a bushel.

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2. Investors Turn More Bearish on Corn and Less Bullish on Beans

Money managers raised their net-short positions, or bets on lower prices, in corn last week while turning less bullish on beans.

Investors held 194,097 net-shorts in corn in the seven days that ended on Aug. 4, up from 158,282 contracts a week earlier, according to the Commodity Futures Trading Commission.

That’s the largest bearish position since the end of June.

Speculators held 43,651 net-long positions, or bets on higher prices, in soybeans last week, down from 59,192 contracts seven days earlier, the CFTC said in a report.

That’s the smallest bullish position held since the week that ended on June 23.

Investors have been more bearish on corn and less bullish on beans in recent months amid favorable growing weather in the U.S. Corn Belt.

Money managers turned bearish on soft-red winter wheat last week, holding a net-short position of 976 futures contracts. That’s a shift from a net-long position of 825 contracts a week earlier and the first bearish position since July 14.

In hard-red winter wheat, speculators held 26,467 net-short positions as of Aug. 4, up from 20,450 contracts a week earlier.

That’s the biggest bearish position in hard-red futures since July 7, the CFTC said in its report.

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. Heat Advisories Issued For Southern Midwest With Temperatures Nearing 110°F.

Heat advisories are in effect in several Oklahoma, Arkansas, and southeastern Missouri counties this morning as indexes head to almost 110°F., according to the National Weather Service.

In eastern Oklahoma and western Arkansas, indexes are expected to top out at 108°F. this afternoon, the NWS said in a report early this morning.

“The combination of hot temperatures and high humidity will combine to create a dangerous situation in which heat illnesses are possible,” the agency said.

In southern Missouri and western Kentucky, meanwhile, heat indexes are forecast to hit around 105°F. this afternoon.

Farther north, storms are hitting much of southern Minnesota and central Wisconsin. Flash flood and severe thunderstorm warnings are in effect in the region, the NWS said.

Storms are rolling across the area now, with some bringing winds of 60 mph and quarter-size hail, the agency said.

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