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3 Big Things Today, August 3, 2020

Soybeans Higher, Corn Unchanged Overnight; Investors Less Bullish Week-to-Week.

1. Soybean Futures Rise as Dry Spots Form in Midwest

Soybean futures were higher in overnight trading on forecasts for little rain in parts of the Midwest.

No precipitation is expected in Iowa and most of northern Illinois today or tomorrow, weather maps show, which could exacerbate drought that’s formed in the area.

Almost the entire eastern half of Iowa was in some sort of drought with many counties in the west-central part of the state under a “severe” drought, according to the U.S. Drought Monitor. Several other counties are under a moderate drought.

Under a severe drought, crop or pasture losses are likely, water shortages are common, and water restrictions are likely to be imposed.

In a moderate drought, there may be some damage to crops. Streams and reservoirs will run low and water use could be requested, the Drought Monitor said.

About 72% of the U.S. soybean and corn crops were rated good or excellent at the start of last week, according to the Department of Agriculture. The agency will release its weekly crop progress report today.

Soybean futures for December delivery rose 4½¢ to $8.97 a bushel overnight on the Chicago Board of Trade. Soymeal fell 80¢ to $296.50 a short ton, and soy oil added 0.4¢ to 31.16¢ a pound.

Corn futures for December delivery were unchanged at $3.27 a bushel.

Wheat futures for September delivery fell 6½¢ to $5.24¾ a bushel overnight while Kansas City futures dropped 6¼¢ to $4.36¼ a bushel.

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2. Investors Raise Bearish Bets on Corn, Lower Bullish Stance on Beans

Money managers increased their net-short positions, or bets on lower prices, in corn last week while reducing bullish bets on beans, according to the Commodity Futures Trading Commission.

Speculators raised their net-shorts in corn to 158,282 futures contracts in the seven days that ended on July 28, the CFTC said in a report.

That’s up from 155,676 contracts a week earlier and the biggest such position since June 30.

Investors, however, reduced their net-long positions, or bets on higher prices, in soybeans to 59,192 futures contracts, the agency said.

That’s down from 73,109 contracts a week earlier and the smallest bullish position since the seven days that ended on June 23.

Hedge funds and other large investors have become less bullish on corn and beans in recent weeks on favorable weather in the Midwest, which has led to lofty crop conditions.

In wheat, money managers cut their bullish bets on soft-red winter futures to 825 contracts, down from 2,628 a week earlier, the CFTC said.

Speculators also were more bearish on hard-red winter wheat, cutting their net-short positions to 20,450 contracts last week. That’s up from 19,746 contracts seven days earlier, the agency said.

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. Storms Possible in Southern Michigan, Northern Indiana Monday

Thunderstorms are possible in parts of southern Michigan and northern Indiana today, though severe weather isn’t expected, according to the National Weather Service.

The storms are likely closer to Lake Michigan and will be accompanied by gusty winds, the NWS said in a report early this morning.

Storms also are possible in eastern Missouri and southern Illinois this morning, the agency said. Patchy fog will reduce visibility this morning, and more isolated thunderstorms are forecast for this afternoon and evening.  

In the southern Plains, meanwhile, isolated storms are expected later this afternoon into the early evening in parts of Oklahoma, though severe weather isn’t expected, the NWS said.

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