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3 Big Things Today, July 26, 2021

Soybeans, Grains Lower Overnight; Speculative Investors Raise Bullish Bets.

1. Soybean and Grain Futures Decline in Overnight Trading

Soybean and grain futures were lower in overnight trading amid signs of slack demand for U.S. supplies.

Export sales have slowed considerably in the past few weeks with China and other countries canceling shipments of agricultural products from the U.S.

Soybean sales to overseas buyers in the seven days that ended on July 15 fell 22% from the prior four-week average to 62,000 metric tons as unnamed buyers nixed cargoes of 58,200 metric tons, according to the U.S. Department of Agriculture.

Cancellations led to a net-reduction in corn sales last week as China voided sales totaling 160,000 metric tons, the USDA said.   

Soymeal exports last week hit a marketing-year low of 68,300 metric tons.

While most of the Midwest will be hot and dry this week, parts of North Dakota, which has been ravaged by drought this growing season, may see some thunderstorms today.

Still, much of the Midwest is staring down triple-digit temperatures this week, which likely will limit moves to the downside.

Soybean futures for November delivery dropped 12¢ to $13.39¾ a bushel overnight on the Chicago Board of Trade. Soymeal lost $3.70 to $352.50 a short ton, while soy oil fell 0.24¢ to 62.99¢ a pound.

Corn futures for May delivery fell 5¾¢ to $5.37¼ a bushel.

Wheat futures for September delivery plunged 11¢ to $6.73 a bushel, while Kansas City futures lost 9¼¢ to $6.36¾ a bushel.

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2. Speculators Raise Net-Longs in Corn and Beans

Money managers last week raised their net-long positions, or bets on higher prices, in corn futures for the first time in almost two months, according to the Commodity Futures Trading Commission.

Investors held a net-218,563 corn futures contracts as of July 20, up from 204,888 contracts a week earlier, and the first increase since the week that ended on June 1, the CFTC said in a report.

That’s also the highest such position since the seven days that ended on June 29.

Speculators also raised their bullish bets on soybeans to a net-88,621 futures contracts last week, the agency said. That’s up from 76,561 contracts a week earlier and the highest level since June 15.

Hot and dry weather in parts of the northern Plains and Canadian Prairies have been underpinning prices.

In wheat, investors raised their net-long positions in hard-red winter futures to the highest level in more than two months.

Hedge fund managers and other large investors held 26,613 futures contracts as of July 20, up from 20,600 contracts a week earlier and the most since May 11, the government said.

Speculators held a net-short position in soft-red winter-wheat futures last week, down from 26,265 contracts seven days earlier, the CFTC said in its report.  

The weekly Commitments 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. Hot, Dry Weather Expected This Week in Much of Midwest

Hot and dry weather is expected in much of the central and western Corn Belt this week with temperatures forecast to reach well into the triple digits.

A heat advisory has been issued for much of South Dakota, the eastern two-thirds of Nebraska, and parts of Minnesota, Iowa, Kansas, and Missouri, according to the National Weather Service.

In western South Dakota, temperatures this afternoon will hit as high as 110°F., the NWS said in a report early this morning. The high temperatures are expected to persist through at least Wednesday night, the agency said.

In central Nebraska and northern Kansas, heat index values tomorrow and Wednesday are forecast to hit 108°F. Light winds are expected, but likely won’t provide much relief.

 In central Iowa, meanwhile, heat indexes are forecast to jump to 110°F. on Wednesday.

“Extreme heat and humidity will significantly increase the potential for heat-related illnesses, particularly for those working [outside] or participating in outdoor activities,” the NWS said.

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