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3 Big Things Today, December 7, 2020

Soybeans, Grains Lower Overnight; Investors Cut Bullish Bets Across the Board.

1. Soybean and Grain Futures Drop in Overnight Trading

Soybeans and grains plunged overnight on signs of weak demand for U.S. inventories and improved rainfall in parts of Brazil.

Exporters haven’t reported any sales of 100,000 metric tons or more of soybeans to overseas buyers in almost a month. The last time a large sale was reported was on Nov. 9, according to the U.S. Department of Agriculture.

Corn sales have been better, but not great, as the USDA on Friday reported a sale of 182,020 metric tons of the grain to Mexico.

The agency said soybean sales in the seven days that ended on Nov. 26 dropped to a marketing-year low and that corn sales fell 18% week-to-week. Wheat sales slid 44% from the prior week, the USDA said.

Also weighing on prices is more favorable weather in Brazil, the world’s largest exporter of soybeans.

Rainfall last week favored parts of central Brazil and are expected in northern and central states this week, according to Commodity Weather Group.

Short-term stress will ease, but a third of the country’s corn and about half of the soybeans will continue to see long-term moisture deficits, CWG said in a report. Wetter trends will persist in parts of northern Brazil, the forecaster said.

Soybean futures for November delivery fell 10¼¢ to $11.52¾ a bushel overnight on the Chicago Board of Trade. Soymeal dropped $4.40 to $381.10 a short ton, and soy oil lost 0.39¢ to 38.02¢ a pound.

Corn futures fell 4½¢ to $4.16 a bushel overnight.

Wheat futures for September delivery were down 8½¢ to $5.67 a bushel, while Kansas City futures fell 9¼¢ to $5.33½ a bushel.

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2. Speculative Investors Cut Bullish Positions in Grains and Beans

Money managers reduced their net-long positions, or bets on higher prices, on corn and soybeans last week, according to the Commodity Futures Trading Commission, amid slack demand for U.S. supplies.

Investors held a net-long position of 251,099 futures contracts in corn in the seven days that ended on Dec. 1, the CFTC said in a weekly report.

That’s down from 266,560 contracts a week earlier and the smallest bullish position since the week that ended on Oct. 20, government data show.

In soybeans, investors were net-long by 189,217 futures contracts last week, down from 195,011 contracts seven days earlier.

That’s the smallest such position since the seven days that ended on Sept. 8, the agency said.

Hedge-fund managers and other large investors likely sold contracts and liquidated positions due to weak demand for U.S. supplies.

Investors turned bearish on soft-red winter wheat, holding a net-short position, or bets on lower prices, of 9,733 contracts last week, the CFTC said.

That’s a shift from a net-long position of 12,798 soft-red winter contracts a week earlier and the first bearish position since Aug. 18.

For hard-red winter wheat, speculators held a net-long position of 43,872 futures contracts as of Dec. 1, down from 47,601 contracts a week earlier and the smallest bearish position since Oct. 27, the CFTC said in its report.


3. Freezing Fog Advisory and Red-Flag Warning Issued in Separate Parts of Nebraska

A freezing fog advisory has been issued for counties in both states along the Nebraska-Iowa border this morning, according to the National Weather Service.

Visibility has been reduced to .25 mile in some areas and is as low as 2 miles in others, the NWS said in a report early this morning. Driving conditions are “hazardous,” and the advisory will remain in effect until about 7 a.m. local time.

“If driving, slow down, use your headlights, and leave plenty of distance ahead of you,” the agency said. “Also, be alert for frost on bridge decks causing slippery roads.”

In central Nebraska, meanwhile, a red-flag warning has been issued as extremely dry weather is making conditions ripe for wildfires.

Relative humidity in the area is pegged as low as 15% today with winds sustained from 15 to 20 mph and gusts up to 30 mph, the agency said.

Farther north, light snow is expected in parts of northern Minnesota today with “minor” accumulations of less than .5 inch. Freezing drizzle also is expected, which will make roads slippery, the NWS said.

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