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3 Big Things Today, December 11

Beans, Corn Lower in Overnight Trading; Money Managers Warming Up to Crop Contracts

1. Soybeans, Corn Lower Ahead of WASDE on Favorable Brazil Weather

Soybeans and corn were lower ahead of tomorrow’s World Agricultural Supply and Demand Estimates (WASDE) Report from the USDA amid favorable weather in Brazil.

Some rain is expected in parts of the South American country that will likely boost crops. Still, Argentina weather is still dry, which may curb productions, according to forecasters.

The USDA report out tomorrow is expected to hold few surprises, though Argentina’s crop is expected to be smaller than previously forecast.

After record ethanol production in two of the past three weeks, some analysts said they expect the USDA to raise the amount of corn that will be used to make the biofuel this year.

Soybean futures for January delivery fell 7¼¢ to $9.82¼ a bushel overnight on the Chicago Board of Trade. Soy meal lost $4.40 to $327.30 a short ton, and soy oil declined 0.19¢ to 33.43¢ a pound.

Corn futures for March delivery dropped 1¾¢ to $3.51 a bushel in Chicago.

Chicago wheat for March delivery fell 4½¢ to $4.14½ a bushel overnight, and Kansas City futures declined 3½¢ to $4.14½ a bushel.

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2. Money Managers More Bullish Soybeans Last Week, Cut Net-Shorts in Corn

Money managers again warmed up to soybean and corn prices in the week that ended on December 5, according to the Commodity Futures Trading Commission.

Speculative investors increased their net-long positions, or bets on higher prices, in soybeans to 54,885 contracts last week, the CFTC said in a report. That’s up from 30,045 contracts a week earlier and the biggest net-long position since the seven days that ended on October 23.

Traders also reduced their net-short positions, or bets on lower prices, in corn to 155,061 contracts from 194,020 contracts the prior week, CFTC data show. That’s the smallest net-short position since October 23.

Many investors have been more bullish on beans or less bearish on corn since the end of the harvest amid dry weather in Argentina and speculation that demand for U.S. supplies will improve due to such low prices.

Money managers were net short 122,379 soft red winter wheat contracts last week, down from 126,466 contracts a week earlier.

Hard red winter wheat investors were net short by 21,428 contracts, down from 24,440 contracts seven days earlier, according to the CFTC.

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. Strong Winds, Red-Flag Warnings Dominate Weather Forecasts on Monday

Strong winds are the story of the day as gusts of up to 45 mph are expected in many parts of the Midwest.

The winds are expected to be a problem today for much of North Dakota, all of South Dakota, and parts of eastern Nebraska and western Iowa, the National Weather Service said.

Almost all of Kansas is in a so-called red-flag warning due to the strong winds and low humidity. Winds are expected to be sustained from 20 to 25 mph all day with relative humidity as low as 20%, creating tinderbox-like conditions.

The warning is also in effect for parts of eastern Colorado and almost all of Missouri and Arkansas, weather maps show.

“Fires could start quickly, spread furiously, and burn intensely,” the NWS said in a report early Monday morning. “All fires are potentially serious.”

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