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3 Big Things Today, January 22

Soybeans, Corn Higher Overnight; Money Managers Push Bearish Bets on Beans, Grains

1. Soybeans, Corn Higher as Investors Leaning Far to the Short Side

Soybeans and corn were higher in overnight trading on speculation that extremely large short positions will lead to technical buying.

The Commodity Futures Trading Commission said on Friday that money managers extended their net-short positions for both corn and beans to multimonth highs.

That, in turn, has led some analysts to believe investors will buy back their contracts and close their positions at the first sign of bullish news.

Fundamentally, there are some dry spots in Argentina that are being watched, and analysts last week reported that the country’s soybean crop will be smaller than previously expected.

Soybean futures for March delivery added 7¾¢ to $9.85 a bushel overnight on the Chicago Board of Trade. Soybean meal futures gained $3.70 to $335.30 a short ton, while soy oil added 0.11¢ to 32.39¢ a pound.

Corn futures rose 1½¢ to $3.54 a bushel overnight.

Wheat for March delivery gained 4¼¢ to $4.27 bushel overnight in Chicago. Kansas City futures added 3¢ to $4.30½ a bushel.


2. Net Shorts in Corn at Highest in Two Months, Soybeans Highest Since June

Net-short positions in corn rose to the highest level in almost two months, while bets against soybean prices were at the biggest since June, the Commodity Futures Trading Commission said in a report.

Speculative investors pushed their net-short positions in corn to 225,063 contracts in the week that ended on January 16, the biggest such position since November 20, the CFTC said in its weekly Commitment of Traders Report.

Net shorts in soybeans rose to 105,705 contracts last week, the largest such position since June 27, government data show.

Investors have been negative on corn and beans in recent weeks as favorable weather boosts prospects for South American crops, which may add to already lofty global supplies.

Net shorts in soft red winter wheat rose to 148,969 contracts last week from 135,516 contracts. In soft red winter, investors were net short by 14,018 contracts, down from the prior week’s 19,829, the CFTC 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.


3. Blizzard, Winter Storm Warnings Issued For Much of Central Plains, Northern Midwest

A large winter storm is blasting a swath of land stretching from southwestern Kansas all the way into northern Wisconsin today.

A blizzard warning has been issued for several counties in Kansas, Nebraska, Iowa, South Dakota, and Minnesota, and a winter storm warning extends farther northeast, according to the National Weather Service.

In Nebraska, the “first wave of snow” fell overnight and a second band is expected this morning. As much as 8 inches are expected along with wind gusts of up to 50 mph, the NWS said in a report early Monday morning.

Whiteout conditions are expected along the length of the storm, and travel is not advised at this time.

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