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3 Big Things Today, July 30

Soybeans Higher in Overnight Trading; Speculators Raise Bullish Bets on Wheat.

1. Soybeans Higher on Speculation China May Have to Buy U.S. Supplies

Soybeans were higher in overnight trading on some speculation that China will eventually have to buy from the U.S., as it’s getting low on supplies and paying a sharp premium for inventories from Brazil.

Allendale’s Paul Georgy said in a morning note on Monday that news outlets are reporting some Chinese firms are shutting processing plants due to a lack of soybeans. Processors in the Asian country are paying a $47 to $57 premium for South American beans vs. U.S. beans and slowed their buying pace in last week, he said.

“Could be a sign China will have to buy from (the) U.S. even with a tariff increase,” Georgy said.

Prices have been underpinned recently by signs of demand for U.S. soybeans, and corn sales have been robust in recent weeks.

Soybean futures for November delivery rose 6¢ to $8.91¼ a bushel overnight on the Chicago Board of Trade. Soy meal added $2.10 to $333.20 a short ton, and soy oil gained 0.02¢ to 29.04¢ a pound.

Corn futures for December delivery gained 3¢ to $3.79¼ a bushel overnight.

Wheat for September delivery a bushel rose 8¾¢ to $5.39¼ a bushel in Chicago, while Kansas City futures jumped 11¢ to $5.43½ a bushel.

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2. Money Managers Raise Net Longs in Wheat; Beans, Corn Little Changed

Money managers boosted their net-long positions, or bets on higher prices, in wheat last week, while leaving corn and soybeans little changed.

Speculative investors were net long by 22,603 soft red winter wheat futures contracts in the week that ended on July 24, according to the Commodity Futures Trading Commission. That’s up from only 566 contracts seven days earlier, CFTC data show.

Net-long positions in hard red winter wheat totaled 19,822 contracts as of last week, up from 16,274 futures contracts a week earlier, the government said in a report late Friday.

Corn and soybean positions were little changed.

Investors lowered their net-short positions, or bets on lower prices, in corn to 164,923 contracts as of last week, down from 165,965 seven days earlier, the CFTC said.

Bearish positions in soybeans, meanwhile, rose slightly to 73,359 net-short contracts, up from 72,009 contracts a week earlier.

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. Isolated Thunderstorms Expected in Iowa, Severe Weather Forecast in Oklahoma

Isolated thunderstorms are forming over parts of eastern Iowa into northern Illinois, though severe weather isn’t expected, according to the National Weather Service.  

The main threats in the region are lightning and some wind gusts of up to 40 mph are possible, the NWS said in a report early Monday morning. Storms likely will last into Tuesday and Wednesday, and again through the weekend.

Severe thunderstorms, meanwhile, are making their way through parts of southeastern Oklahoma and northern Texas this morning.

The storm was producing wind gusts of up to 60 mph and likely will bring heavy rain to the area, the NWS said. Thunderstorms are expected to continue into this evening that could product strong winds and small hail, the agency said.

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