3 Big Things Today, January 11, 2021

Soybean Futures Higher Overnight; Investors Boost Net-Long Positions in Corn.

1. Soybeans Improve Overnight on Signs of Demand

Soybeans were higher in overnight trading on signs of some demand for U.S. supplies while concerns about dry weather in South America persist.

Exporters reported sales of 213,350 metric tons of soybeans to an unnamed buyer for delivery in the 2020-2021 marketing year that started on Sept. 1, the U.S. Department of Agriculture said in a report late last week.

An additional 130,000 metric tons of beans were sold for delivery in the 2021-2022 marketing year to an unknown destination, the USDA said.

That was the first large sale of soybeans reported since Dec. 28.

In Argentina, meanwhile, there’s a “broad dry pattern” expected in the next couple of weeks with temperatures in the 90s that may expand during the 11- to 15-day period, further stressing crops, Commodity Weather Group said in a report.

While some showers will help the northwestern third of Argentina’s growing areas, up to a third of corn and soybeans will see stress in the next few days, CWG said.

Soybean futures for January delivery jumped 8½¢ to $13.83¼ a bushel overnight on the Chicago Board of Trade. Soymeal added $3.30 to $442.90 a short ton, and soy oil dropped 0.29¢ to 43.3¢ a pound.

Corn futures for March delivery were unchanged at $4.96¼ a bushel overnight.

Wheat futures for March delivery fell 1¼¢ to $6.37½ a bushel, while Kansas City futures lost ½¢ to $5.94¼ a bushel.

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2. Speculative Investors Raise Net-Long Positions in Corn, Soft-Red Winter Wheat

Money managers increased their net-long positions, or bets on higher prices, in corn while reducing their bullish outlook on soybeans last week, according to the Commodity Future Trading Commission.

Investors were net-long by 328,208 corn futures contracts as of Jan. 5, the CFTC said in a report. That’s up from the 309,163 net-long positions held a week earlier.

In soybeans, speculators held a net-long position of 159,446 futures contracts, down from 179,606 contracts a week earlier, the agency said. That’s the smallest bullish position for soybeans since the beginning of September.

Despite the decline in soybeans’ net-long position, investors are still quite bullish on the big three agricultural commodities due to dry weather and shipping concerns in Argentina.

Money managers last week held a net-long 21,726 soft-red winter wheat futures contracts, more than double the prior week’s 9,615 contracts, the CFTC said.

For hard-red winter wheat, investors held a net-long 53,443 futures contracts as of Jan. 5, down slightly from 54,684 contracts seven days earlier, the agency said in its report.

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 Storm Warnings in Effect From Texas Through Gulf Coast

Winter storm warnings are in effect from central Texas where snow fell yesterday east across the Gulf Coast into Mississippi, according to the National Weather Service.

In east Texas and much of Louisiana, snow will come to an end this morning, but roads will be icy and slick, the NWS said in a report early this morning.

When the snow stops falling, as much as 4 inches of accumulation is expected, the agency said. The bad weather isn’t over yet.

“Precipitation across most of the area is expected to remain predominantly cold rain, but across interior southeast Texas and central Louisiana, snow or sleet is expected to mix with the rain, and eventually become the dominant weather type in some locations,” the NWS said. “As such, some accumulation of sleet and snow is forecast, with 1 to 3 inches expected and higher amounts possible.”

Farther north in central Nebraska, freezing fog could be an issue this morning, as slick roads are in the forecast.

In eastern Iowa and northern Illinois, meanwhile, some patchy light freezing drizzle may fall tonight, the NWS said.

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