3 Big Things Today, December 14, 2020

Soybeans Rise, Wheat Falls Overnight; Speculative Investors Reduce Bullish Bets.

1. Soybeans Surge While Wheat Falls in Overnight Trading

Soybeans jumped overnight as stress on crops in Brazil continues to be a problem in some parts of the country.

While rains in some states have eased stress, about 20% of the country’s soybeans are struggling and stress is “struggling to ease in” Mato Grosso and Mato Grosso do Sul, Commodity Weather Group said in a note to clients.

Rainfall is expected in northern Brazil later this week but up to a week of dry weather will follow before another round of precipitation makes its way to the area, CWG said.

Still, widespread rains are now in the forecast for central and southern Brazil, which likely will aid soybeans and corn in the areas.

In the 16- to 30-day outlook, some parts of Argentina may see expanded crop stress, the forecaster said.

Wheat futures turned lower overnight even after Russia said it plans to impose an export tax of about $30 per metric ton of the grain. The added export tax would be in addition to an export quota of 17.5 million metric tons.

Economy Minister Maxim Reshetnikov said in a government meeting that the actions are designed to help stabilize domestic food prices, Reuters reported.

If realized, that likely would shift some demand to the U.S.

Soybean futures for January delivery jumped 10¢ to $11.70½ a bushel overnight on the Chicago Board of Trade. Soymeal gained $1.10 to $381.40 a short ton, and soy oil added 0.64¢ to 38.88¢ a pound.

March wheat fell 6¼¢ to $6.08¼ a bushel, while Kansas City futures lost 6¾¢ to $5.74½ a bushel.

Corn futures for March delivery rose 1¾¢ to $4.25¼ a bushel overnight.

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2. Investors Reduce Bullish Corn and Bean Bets in Week Through Dec. 8

Money managers shrunk their net-long positions, or bets on higher prices, to months-long lows for both corn and beans last week, according to the Commodity Futures Trading Commission.

Investors held 247,595 net-long positions in corn futures in the seven days that ended on Dec. 8, down from 251,099 contracts a week earlier, the CFTC said in a report.

That’s also the smallest such position since the week that ended on Oct. 20, the agency said.

Speculators also held a net-long 177,836 soybean futures contracts, down from 189,217 contracts a week earlier, government data show.

That’s the smallest bullish position since Sept. 8, the CFTC said.

Investors have become less bullish on corn and soybeans the past few weeks amid slack demand for U.S. supplies and improved crop weather in South America.

In wheat, investors last week held a net-short position, or bets on lower prices, of 12,021 contracts in soft-red winter futures.

That’s up from a net-short position of 9,733 contracts seven days earlier and the largest bearish position for the grain since Aug. 18, the CFTC said.

Money managers also held a net-long position of 44,157 hard-red winter wheat futures contracts as of Dec. 8, up from 43,872 contracts a week 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. Winter Weather Heads Into Parts of Nebraska and Oklahoma  

A winter weather advisory has been issued in parts of central Nebraska as more snow and wind is forecast for the area, according to the National Weather Service.

As much as 4 inches of snow is expected in the area with higher amounts possible locally, the NWS said in a report early this morning.

The snow is expected to start at about 9 p.m. this evening and last until about 6 p.m. tomorrow, the agency said.

Winds sustained at up to 15 mph are expected overnight, but will slow to about 10 mphduring the day tomorrow.

Farther south along the Kansas-Oklahoma border, from 2 to 4 inches of snow are expected tomorrow, the NWS said.

Road conditions are expected to deteriorate as the snow falls.

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