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3 Big Things Today, June 11

Corn, Soybeans Slightly Lower Overnight; Money Managers Cut Bets on Higher Crop Futures.

1. Corn, Soybeans Modestly Lower on Favorable Crop Conditions

Corn and soybeans were slightly lower in overnight trading amid favorable weather conditions in the U.S. Midwest.

Rainfall is expected in parts of Iowa and Nebraska throughout the week along with high temperatures, which should help recently emerged crops. In parts of Iowa and Illinois, however, the precipitation may not be overly welcome as flooding is a risk in some counties.

The USDA said last week that about three fourths of the U.S. corn and soybean crops were in good or excellent condition.

That number may fall 1 or 2 percentage points this week but will still be relatively high for this time of year, said Al Kluis of Kluis Commodities in a report early Monday morning.

Also weighing on prices are concerns over trade tensions after President Trump last week left the Group of Seven meeting in Quebec, Canada, early then criticized leaders including Canada’s Justin Trudeau. German Chancellor Angela Merkel said the European Union will advance tariffs on some U.S. products in line with what Canada has done.  

Corn futures for July delivery fell 2¢ to $3.75¾ a bushel overnight on the Chicago Board of Trade.

Soybean futures for July delivery fell 1¾¢ to $9.67½ a bushel overnight. Soy meal lost 60¢ to $357.20 a short ton, and soy oil dropped 0.09¢ to 30.43¢ a pound.

Wheat for July delivery lost 2½¢ to $5.17½ a bushel in Chicago, while Kansas City futures declined 1¢ to $5.37¼ a bushel.

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2. Investors Sharply Decrease Bets on Higher Corn, Bean Prices, CFTC Says                                      

Money managers sharply decreased their bets on higher prices for corn and soybeans last week, according to the Commodity Futures Trading Commission.

Speculators were net long by 78,696 corn futures contracts in the seven days that ended on June 5, the CFTC said in its Weekly Commitment of Traders Report. That’s down from a net-long position of 180,790 contracts seven days earlier.

Bets on higher soybean futures plunged to 65,177 contracts last week, down from 103,590 a week earlier, according to the government.

Investors likely reduced bets on higher prices amid favorable growing conditions for corn and soybeans in the Midwest. While it’s been hot in some areas, rains have been timely.

The U.S. corn crop was rated 78% good or excellent as of June 3 while 75% of the soybean crop earned top ratings, according to the USDA.  

Money managers were net long by 57,167 hard red winter wheat contracts as of last Tuesday, up from 53,608 contracts a week earlier. Investors lowered their net longs in soft red winter wheat to 23,058 contracts from 25,826 seven days prior, 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. Excessive Rainfall Likely to Cause Flooding in Parts of Iowa, Illinois

Flood watches and warnings abound in parts of central Iowa as excessive rainfall in some counties are pushing rivers and streams over their banks.

A stretch of land from Fort Dodge to the Missouri border is all under a flash flood watch this morning, as a storm is expected to drop several inches of rain in the area, according to the National Weather Service.

“Slow-moving thunderstorms, moving over the same general area will be capable of producing heavy rain,” the NWS said in a report early Monday morning. “These storms will persist into the early morning hours. Rainfall amounts between 2 and 4 inches are likely with locally higher amounts possible.”

Flooding is also expected in parts of central Illinois from Jacksonville south and east well into Indiana. Flash flood warnings are in effect along with flood watches and flood advisories, according to the NWS.

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