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3 Big Things Today, January 29

Soybeans, Grains Higher Overnight; Money Managers Curb Bearish Bets in Corn.

1. Soybeans, Corn Rise on Too Much Rain in Brazil, Too Little in Argentina

Soybeans and grains were all higher in overnight trading, and it’s all about the weather.

Persistent rainfall in Brazil has led to concerns about harvest delays and quality, while dry weather in Argentina has traders worried.

Rain has fallen in parts of Parana and Mato Grosso in the past few days and more is expected in the next two days, according to Commodity Weather Group. A shift to a wetter weather pattern in the country’s center-west is expected, which will slow the soybean harvest and planting of the safrinha corn crop into early February.

In Argentina, rainfall this weekend was limited to the northern third of the country but is expected to be limited to the far south in the next two weeks. Drought stress is expected in more than half of the country’s corn and soybean regions into early February.

Soybean futures for March delivery rose 8¾¢ to $9.94¼ a bushel overnight on the Chicago Board of Trade. Soybean meal futures gained $3.60 to $339.30 a short ton, while soy oil added 0.07¢ to 32.86¢ a pound.

Corn futures gained 2¢ to $3.58½ a bushel overnight.

Wheat for March delivery rose 6¾¢ to $4.4 ¾ a bushel overnight, and Kansas City futures gained 7 ½¢ to $4.50½ a bushel.

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2. Money Managers Cut Bearish Bets For Corn, Beans on Adverse South American Weather

Money managers cut their bearish bets on corn and soybeans last week, according to the Commodity Futures Trading Commission.

Investors were net short by 217,057 corn contracts in the week that ended on January 23, the CFTC said in a report on Friday. That’s down from 225,063 contracts a week earlier.

Net-short positions in soybeans fell to 81,218 contracts last week, well below the 105,705 contracts seven days earlier, according to the government.

Adverse weather in South America, including too much rain in Brazil and too little precipitation in Argentina, has helped underpin prices. A weaker dollar, which last week fell to the lowest value in more than three years, also is giving commodities a boost.

Speculators were net short by 149,777 contracts in soft red winter wheat, up slightly week to week, while investors raised their bearish bets in hard red winter wheat to 17,650 contracts from 14,018 a week earlier, 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.

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3. Red-Flag Warning in Effect For Southern Plains Amid Strong Winds, Low Humidity

A red-flag warning has been issued for much of the Southern Plains this morning in parts of Oklahoma and the Texas panhandle.

Wind gusts are expected to top out around 40 mph, according to the National Weather Service. Sustained winds of up to 25 mph are forecast.

Combined with relative humidity as low as 10%, conditions are ripe for the fast spread of wildfires, the agency said in a report early Monday morning. Winds are expected to pick up into Tuesday and likely will persist through tomorrow evening.

In the Southern Plains, showers are expected to be “minimal” the next two weeks, and a snow event next week isn’t forecast to be as strong as previously expected, which may leave more wheat at risk of winterkill if extreme cold weather returns to the region, Commodity Weather Group said.

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