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3 Big Things Today, July 13, 2020

Corn, Beans Lower in Overnight Trading; Investors Curb Bearish Bets on Corn.

1. Corn and Soybeans Lower in Overnight Trading

Corn and soybean futures were lower in overnight trading on rainfall over the weekend that likely gave crop prospects a boost.

Rain fell in several key areas where drought was spreading, which will help ease stress from the hot, dry weather much of the Midwest experienced last week.

Some precipitation is expected in the northern Midwest today, which could further alleviate any drought stress on crops. Still, it’s going to be extremely hot from New Mexico through Texas into Louisiana and Arkansas today.

On the bull side, the U.S. Department of Agriculture said Friday that China bought 1.37 million metric tons of soybeans for delivery in both the 2019-2020 and 2020-2021 marketing years.

China also bought a total of 320,000 metric tons of hard-red spring wheat for delivery in the year that starts on Sept. 1, the USDA said.

Corn futures for December delivery dropped 7¼¢ to $3.37½ a bushel overnight on the Chicago Board of Trade.

Soybean futures for December delivery fell 7½¢ to $8.83¼ a bushel. Soymeal lost $3.10 to $297 a short ton and soy oil declined 0.23¢ to 28.61¢ a pound.

Wheat fell 2½¢ to $5.31½ a bushel while Kansas City futures lost ¾¢ to $4.51¼ a bushel.

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2. Speculative Investors Cut Net-Short Positions in Corn, Bump Bullish Bets on Beans

Money managers slashed their net-short positions, or bets on lower prices, to the lowest level in almost three months while raising their bullish bets on beans to the highest in more than two years.

Speculators in the seven days that ended on July 7 held a net-short position of 150,338 corn futures contracts, down from 211,668 contracts a week earlier and the smallest bearish position since the week that ended on April 14, according to the Commodity Futures Trading Commission.

Investors also held a net-long position, or bets on higher prices, of 90,618 soybean futures contracts last week, up from 63,366 contracts a week earlier. That’s the largest bullish position in beans since May 2018, the CFTC said in a report.

Hot weather in much of the Midwest last week likely led to the increase in bullish sentiment in corn and beans. Rain is on the way in some areas, though others could remain dry for some time, weather forecasters said last week.

In wheat, investors held a net-short position of 32,370 soft-red winter contracts as of July 7, down from 37,611 contracts a week earlier. That’s the smallest such position since June 16.

Money managers also reduced their bearish bets on hard-red winter wheat, whose net-short positions declined to 34,003 contracts from 36,742 contracts a week earlier. That’s also the smallest bearish position since mid-June, government data show.

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. Thunderstorms Likely in Northern Midwest While Heat Wave Continues South

Thunderstorms are likely later today in parts of Minnesota and western Wisconsin, according to the National Weather Service.

Large hail, strong winds, and heavy precipitation are in the forecast along with potential tornadoes, the NWS said in a report early this morning. The storms will continue in the region into tomorrow, when heavy rain is expected.

Farther south, the heat wave continues as much of eastern New Mexico, almost all of Texas, some counties in Arkansas, and the entirety of Louisiana are under an excessive heat warning or heat advisory, weather maps show.

In east Texas and western Louisiana, an excessive heat warning is in effect as heat index values are expected to be 110°F. or higher today. The heat warning is in effect until 7 p.m. local time this evening, the NWS said.

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