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3 Big Things Today, December 6, 2021

Soybeans Lower in Overnight Trading; Investors Cut Net-Longs in Corn.

1. Soybean Futures Decline in Overnight Trading

Soybean futures were lower in overnight trading on worries that China’s imports of the oilseeds from the U.S. will decline.

Chinese soybean imports plunged more than 80% in September after Hurricane Ida damaged shipping facilities in the U.S. Gulf Coast, according to the Department of Agriculture.

The window for shipping to China is narrow for U.S. exporters as Brazilian crops will become readily available in the first quarter of 2022, according to a report from Reuters, citing Zou Honglin, an analyst with Chinese consultancy Mysteel. That may lead to a decline for the entire marketing year.

Wheat and corn futures also were lower overnight.

Still, underpinning prices is continued demand for U.S. products.

Exporters said an unnamed country bought 122,000 metric tons of soybeans for delivery in the marketing year that started on Sept. 1, according to the USDA.

The agency reported sales four days last week including corn to Colombia and beans to China.

For wheat, prices may be easing after the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) said last week it now expects a record wheat crop.

Soybean futures for November delivery fell 6¢ to $12.61¼ a bushel overnight on the Chicago Board of Trade. Soymeal lost $2.90 to $355.70 a short ton, while soy oil rose 0.03¢ to 57.25¢ a pound.

Corn futures for December delivery were down 3½¢ to $5.80½ a bushel.

Wheat futures for December delivery dropped 3¼¢ to $8.00½ a bushel, while Kansas City futures fell 3¾¢ to $8.20½ a bushel.

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2. Investors Curb Net-Long Positions in Corn and Beans

Speculative investors cut their net-long positions, or bets on higher prices, in corn to the lowest in more than a month while also reducing their bullish bets on beans, according to the Commodity Futures Trading Commission.

Money managers held a net-303,534 corn-futures contracts in the seven days that ended on Nov. 30, the CFTC said in a report.

That’s down from 362,009 contracts a week earlier and the lowest level since the week that ended on Oct. 26.

Investors held 31,074 soybean-futures contracts last week, down from 50,268 contracts a week earlier, the agency said.

In wheat, fund managers and other large investors reduced their net-long position in hard-red winter futures to 61,915 contracts last week from 65,320 contracts seven days earlier, the CFTC said.

Speculators were much less bullish on soft-red winter futures, dropping their bullish positions to a net-4,882 contracts as of Nov. 30.  That’s down from a net long of 20,120 contracts a week earlier and the lowest since Nov. 9.

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.

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3. Extreme Cold Expected in Northern Plains

Weather maps are relatively active today with winter weather in the Northern Plains and wind advisories issued for parts of the Midwest.

A wind chill advisory has been issued for much of northern North Dakota and Minnesota, according to the National Weather Service.

Wind chills in North Dakota are forecast as low as -30°F., the NWS said in a report early this morning.

“The dangerously cold wind chills could cause frostbite on exposed skin in as little as 10 minutes,” the agency said.

In northern Wisconsin, a winter storm warning is in effect until noon as up to 4 inches of snow is expected, the NWS said. Winds will gust up to 40 mph.

In eastern Iowa, northern Illinois, southern Wisconsin, and southern Minnesota, strong winds are expected to continue through the morning.

Winds overnight were sustained from 20 to 30 mph in parts of the area, with gusts up to 50 mph, the agency said.

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