3 Big Things Today, August 27
1. Soybeans Fall as Crop Tour Pegs Output Above USDA Outlook
Soybean futures dropped in overnight trading after the Pro Farmer Crop Tour of the Midwest pegged output above the USDA’s already-lofty forecasts.
Participants on the annual tour of the Corn Belt projected soybean production at 4.683 billion bushels on yields of 53 bushels an acre. That tops the USDA’s outlook for 4.586 billion bushels on yields of 51.6 bushels an acre.
Pod counts were better than expected in every state surveyed, Reuters said.
Wheat futures fell for a sixth straight session amid weak demand for U.S. supplies. Last week’s Export Sales Report showed sales fell to the lowest in six weeks.
Soybean futures plunged 14¼¢ to $8.41¼ a bushel overnight on the Chicago Board of Trade. Soy meal futures lost $5.60 to $310.70 a short ton, and soy oil declined 0.19¢ to 28.30¢ a pound.
Wheat for December delivery fell 6¾¢ to $5.29¾ a bushel in Chicago, while Kansas City futures lost 7½¢ to $5.39¼ a bushel.
Corn for December delivery fell 3¢ to $3.59¾ a bushel overnight.
2. Speculators Curbed Net-Short Positions in Corn, Soybeans Last Week
Money managers reduced their net-short positions, or bets on lower prices, in both corn and soybeans last week while remaining bullish on wheat.
Speculators were net short by 49,896 corn futures contracts in the week that ended on August 21, according to the Commodity Futures Trading Commission. That’s down from 60,139 contracts a week earlier, the CFTC said in a report.
Investors were net short by 42,027 soybean futures contracts as of last week, down sharply from 62,234 contracts seven days earlier, according to the government.
Money managers have been reducing their net-short positions in both corn and soybeans in recent weeks due to a combination of declining crop conditions in the Midwest and on optimism that negotiators would be able to hammer out a deal to end a trade dispute between the U.S. and China.
The annual Pro Farmer Crop Tour predicted better-than-expected yield and production, and talks between the world’s two biggest economies ended up bearing no fruit.
Investors were net long 57,447 soft red winter wheat futures contracts as of last week, down from 65,226 contracts seven days earlier, the CFTC said. Net-long positions in hard red winter wheat rose to 63,364 contracts from 62,234 a week earlier.
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.
3. Much of Illinois Seeing Excessive Heat Warnings, Watches; Flooding Possible in Wisconsin
Parts of the Midwest are in excessive heat or heat warnings starting today, as heat indexes will jump well into the triple digits.
Indexes are expected to hit as high as 110˚F. today and tomorrow in parts of extreme eastern Missouri and Iowa and almost all of Illinois , according to the National Weather Service.
Actual temperatures will be in the lower 90s today and Tuesday, the NWS said in a report early Monday morning. People working outdoors are advised to look for signs of heat-related illness.
Farther north, a flash flood watch is in effect for several counties in central Wisconsin, as heavy rain is expected to start tonight. The area already has received as much as 1½ inches of rainfall and another 3 inches is possible.
That could cause some rivers and streams to breach their banks, the NWS said.