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3 Big Things Today, June 25

Wheat Futures Decline Overnight; Money Managers Turn Bearish on Beans.

1. Wheat Drops as U.S. Harvest Moves On, Rain Falls in Australia

Wheat futures plunged overnight as the U.S. winter harvest moves on and amid positive growing weather in Australia.

About 27% of the U.S. winter crop was harvested as of June 17, topping the prior five-year average of 19% for the week, according to the USDA. The USDA will release its Weekly Crop Progress Report today.

Along with a speedy U.S. harvest, the Australian crop is seeing promising crop weather. Rainfall in southern and western growing areas has been reported, which has given plants in the country a boost.

While more rain is forecast in coming weeks, some growers didn’t get the chance to plant because the drought that plagued the Wheat Belt prevented some farmers from sowing their fields.

Wheat for September delivery dropped 10½¢ to $4.93¾ a bushel overnight on the Chicago Board of Trade. Hard red winter futures fell 10½¢ to $4.95 a bushel.

Soybeans declined amid ongoing concerns about the state of trade with China, the world’s biggest buyer of the grain. On Sunday, President Trump told trading partners with the U.S. that they need to remove their tariffs or face consequences, renewing the trade war with the Asian nation.

Soybean futures for July delivery dropped 10½¢ to $8.84 a bushel overnight. Soy meal lost $4.60 a short ton, and soy oil fell 0.05¢ to 29.88¢ a pound.

Corn futures fell 2¾¢ to $3.54½ a bushel overnight.


2. Speculators Turn Bearish on Soybeans, Increase Net-Short Position in Corn

Money managers turned bearish on soybeans and extended their positions in corn to the biggest net short since February 6.

Speculators were net short by 27,073 soybean futures contracts in the week that ended on June 19, according to the Commodity Futures Trading Commission. That’s the shortest position they’ve held in soybeans since the week that ended on January 23.

Last week, investors were net long by only 105 contracts.

Investors held 57,451 net-short positions, or best on lower prices, in corn last week, the CFTC said in a report. That’s up from 12,238 net shorts a week earlier.

Money managers are becoming more bearish on corn and soybeans amid good growing conditions in the Midwest. While there’s been too much rain in some areas, much of U.S. Corn Belt has seem fairly ideal crop progress since the start of the growing season.  

Speculators also were net short by 4,861 soft red winter wheat contracts as of June 19, a shift from a net-long position of 25,135 contracts a week earlier, according to the CFTC.

They pushed their net-long positions, or bets on higher prices, in hard red winter wheat to 46,870 contracts from 60,606 futures a week earlier, the government 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. Flood Warnings, Flash Flood Watches in Effect For Several Midwest States

Flood warnings and flash flood watches are in effect for several counties in Iowa, Nebraska, South Dakota, and Minnesota this morning, according to the National Weather Service.

The flood warnings are for several rivers and streams in the area where the four states meet and will last through Monday evening. The flash flood watches also will last through tonight.

“Thunderstorms are expected to continue through Monday afternoon,” the NWS said in a report early Monday morning. “Some of these storms could result in rainfall rates of 1 to 3 inches per hour, which could cause flash flooding in both urban areas and rural areas in the watch area.”

Several rivers and streams in northeastern Illinois also are overrunning their banks, leaving to several flood warnings in the region, according to the agency.

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