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3 Big Things Today, August 23, 2021

Soybeans, Grains Higher Overnight; Investors Bump Net-Longs in Corn.

1. Soybean Futures Surge in Overnight Trading

Soybean futures jumped in overnight trading and grains were higher on continued signs of demand and forecasts for more hot weather in U.S. growing areas.

Exporters reported sales of soybeans for 11 straight sessions through Thursday, according to data from the U.S. Department of Agriculture.

The latest round of sales was to China, which bought 263,000 metric tons of soybeans, and to Mexico, which purchased almost 150,000 metric tons from U.S. supplies, the USDA said.

From the start of the marketing year on Sept. 1 through Aug. 12, exporters shipped 59.7 million metric tons of soybeans to overseas buyers, up 43% from the same time frame last year, government data show.

Corn shipments since the beginning of September are now at 65.4 million metric tons, up 59% year-over-year.

Hot weather is expected to return to parts of the Corn Belt today.

Heat advisories and excessive heat warnings will go into effect today in parts of Missouri, Arkansas, and Kansas, according to maps from the National Weather Service.

While prices are rising, investors also are weighing the results from last week’s ProFarmer Midwest Crop Tour that estimated the U.S. soybean crop at 4.436 billion bushels and the corn crop at 15.116 billion bushels. Both forecasts are above USDA projections.

Also keeping a lid on corn futures is a report from Reuters indicating the U.S. Environmental Protection Agency will curb biofuel blending mandates, which would potentially reduce the amount of corn used to make ethanol.

Soybean futures for November delivery jumped 16¼¢ to $13.07 a bushel overnight on the Chicago Board of Trade. Soymeal rose 80¢ to $355.70 a short ton, while soy oil gained 1.37¢ to 58.02¢ a pound.

Corn futures for December delivery gained 3½¢ to $5.40½ a bushel.

Wheat futures for September delivery surged 11¾¢ to $7.40 a bushel, while Kansas City futures added 10¢ to $7.25¾ a bushel.

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2. Investors Bump Net-Longs in Corn to Highest Since June

Money managers raised their net-long positions, or bets on higher prices, in corn to the highest level in more than two months last week while also raising bullish bets on beans, according to the Commodity Futures Trading Commission.

Investors pushed their net-longs in corn to 269,082 futures contracts in the seven days that ended on Aug. 17, the CFTC said in a report.

That’s up from 246,471 contracts a week earlier and the highest level since June 8.

Speculators also raised their bullish positions in soybeans, holding a net-93,706 contracts last week, up from 86,908 contracts a week earlier. That’s the largest such position since June 15, the agency said.

Investors have become more bullish on corn and beans amid signs of strong demand for U.S. supplies in the past couple of weeks.

In wheat, hedge funds and other large investors held a net-45,573 hard-red winter contracts, up from 43,714 contracts a week earlier, the government said. That’s the largest such position since the seven days that ended on March 9.

Money managers also held 22,093 soft-red-winter wheat futures contracts as of Aug. 17.

That’s up from 16,905 contracts a week earlier and also the biggest bullish position since March 9, the CFTC said in its report.

The weekly Commitments 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.


3. Hot Weather to Last in Missouri, Arkansas Through Thursday

A large chunk of the U.S. Midwest is facing hot weather again as heat indexes reach into the triple digits, according to the National Weather Service.

Heat advisories have been issued for all of Missouri and Arkansas along with parts of eastern Kansas, eastern Oklahoma, and western Illinois, NWS maps show.

Indexes in Missouri likely will hit as high as 106°F. today. A heat advisory in the state will take effect at 11 a.m. this morning and last through 7 p.m. Thursday.

In southeastern Arkansas, an excessive heat warning will be in effect from 11 a.m. today through 8 p.m. Thursday. Heat index values are forecast up to 112°F., the NWS said.

In western South Dakota, meanwhile, a red-flag warning will be in effect today amid low humidity and gusty winds.

Relative humidity is expected to drop as low as 12% while winds are forecast from 10 to 20 mph with gusts of up to 30 mph, the agency said.

“The combination of gusty winds and low relative humidity would produce critical fire weather conditions,” the NWS said.

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