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3 Big Things Today, June 29, 2020

Corn, Wheat Higher Overnight; Investors Bump Bullish Bean Bets to Seven-Month High.

1. Grain Futures Higher Overnight on Signs of Demand

Corn and wheat were slightly higher overnight on signs of demand for U.S. agricultural products.

The U.S. Department of Agriculture Friday said an unknown country bought 203,500 metric tons of grain sorghum. Of the total, 135,500 metric tons are slated for delivery in the 2019-2020 marketing year that ends on Aug. 31 and the rest is expected to be delivered in the next crop year.

Exporters also said that China bought 132,000 metric tons of soybeans for delivery in the current marketing year, the USDA said.

Extremely hot weather is expected in the northern Plains today, which also may be underpinning prices, though weather conditions in much of the Midwest have so far been mostly favorable for crops.

The corn crop last week was rated 72% good or excellent, up from 56% at the same time a year earlier, and 70% of the soybean crop earned top ratings, up from 54% last year. The USDA will release its weekly crop progress report this afternoon.  

Corn futures for July delivery rose 3¢ to $3.20 a bushel overnight on the Chicago Board of Trade.

Wheat futures for July delivery gained 3¼¢ to $4.79¼ a bushel, while Kansas City futures rose ¼¢ to $4.28 a bushel. 

Soybean futures fell 1¼¢ to $8.63¾ a bushel. Soymeal futures rose 20¢ to $282.30 a short ton, and soy oil lost 0.17¢ to 27.03¢ a pound.

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2. Speculators Raise Net-Long Positions in Soybeans to Seven-Month High

Money managers bumped their bullish bets on soybeans to the highest level in more than seven months, according to data from the Commodity Futures Trading Commission.

Speculators in the week than ended on June 23 held a net-long position, or bets on higher prices, of 43,028 soybean futures contracts, the CFTC said in a report.

That’s up from 19,879 contracts a week earlier and the largest such position since the seven days that ended on Nov. 5, government data show.

Improved demand from overseas buyers has helped boost the appeal of soybeans.

Investors, however, raised their bearish bets on corn last week to a net-short position of 285,942 futures contracts. That’s up from 277,603 contracts a week earlier.

In wheat, hedge funds and other large speculators held a net-short position of 45,176 soft-red winter futures contracts, up from 26,663 contracts a week earlier and the biggest bearish position since May 2019, the CFTC said.

Money managers were more bearish on hard-red winter wheat as well, raising their net-short to 37,507 futures contracts, up from 27,655 contracts seven days earlier. That’s also the largest negative position on hard-red winter wheat since Sept. 17, agency 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.

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3. Hot Weather Expected in Dakotas and Parts of the Southern Plains

A heat advisory is in effect for much of South Dakota and parts of North Dakota as temperatures in the region are expected to top the century mark, according to the National Weather Service.

Heat index values are forecast up to 105°F. today, the NWS said in a report earlier this morning. Heat illnesses are possible for those who are exposed to the high temperatures for too long, the agency said.

Hot weather and low humidity also will create some problems in the southern Plains today. In southwestern Kansas and the Oklahoma panhandle, temperatures are expected to range from 100°F. to 104°F., the NWS said.

In parts of the Texas and Oklahoma panhandles, temperatures could hit 106°F.

A red-flag warning will be in effect from about 11 a.m. local time through the evening as the high temperatures and relative humidity as low as 9% will create tinderbox-like conditions.

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