3 Big Things Today, March 8, 2021

Soybeans Surge in Overnight Trading; Speculators Curb Bullish Bets on Corn, Beans.

1. Soybeans Jump to Highest in Almost Seven Years

Soybeans surged to the highest price in almost seven years and grains were higher in overnight trading on adverse weather conditions in South America.

Farmers in parts of Brazil, the world’s largest exporter of soybeans, have been unable to harvest their mature crops due to excessive precipitation in several growing areas.

Rain again fell last week in several Brazilian states including Mato Grosso, Mato Grosso do Sul, Goias, and Sao Paulo, according to forecaster Maxar.

Rains were expected by the weather company to continue through Tuesday. Showers in east-central and northwest areas were forecast to slow soybean and corn harvesting further, Maxar said in a report on Friday.

In Argentina, meanwhile, extremely dry weather his week is expected to cause stress on some crops, Maxar agricultural meteorologist Donald Keeney said in the report. Still, some improvement is expected early this week.

READ MORE: Soybean market leads off the week's trading Monday

Brazilian soybean production is seen by the U.S. Department of Agriculture at 133 million metric tons and exports are pegged at 85 million tons. That compares with output of 126 million tons a year earlier and shipments of 92.1 million tons, the USDA said.

Prices also may be rising ahead of tomorrow’s monthly World Agricultural Supply and Demand Estimates (WASDE) report in which the government is expected to lower its stockpiles forecast for both corn and soybeans, according to analysts.

Soybean futures for May delivery jumped 14¢ to $14.44 a bushel overnight on the Chicago Board of Trade. Soymeal was up $4 to $422.20 a short ton, and soy oil rose 0.64¢ to 52.44¢ a pound.

Corn rose 3½¢ to $5.49 a bushel.

Wheat futures for May delivery added 2½¢ to $6.55½ a bushel, while Kansas City futures gained 1¼¢ to $6.27½ a bushel.

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2. Speculators Curb Net-Long Positions in Corn and Beans

Money managers reduced their net-long positions, or bets on higher prices, in both corn and beans last week, according to the Commodity Futures Trading Commission.

Investors lowered their bullish positions in corn to 330,839 futures contracts in the seven days that ended on March 2, the CFTC said in a report.

That’s down from 345,060 futures contracts a week earlier and the smallest such position since the week that ended on Feb. 2.

Speculators also reduced their bullish positions in soybeans to the lowest level in six weeks.

Hedge funds and other large investors cut their net-longs in soybeans to 143,329 futures contracts, down from 159,915 seven days earlier. That’s also the smallest net-long position since Jan. 19, government data show.

In wheat, investors also reduced their bullish positions in hard-red winter futures to 51,684 contracts, down from 53,191 contracts a week earlier and the smallest such position since the week that ended on Dec. 21.

Money managers, however, raised their net-longs in soft-red winter futures to 25,360 contracts, up from 20,461 contracts the previous week.

That’s also the largest bullish position since the seven days that ended on Nov. 10, 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.

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3. Red-Flag Warnings Issued in Parts of Eastern Kansas, Western Missouri

A red-flag warning has been issued for parts of northeastern Kansas and counties in western Missouri amid strong winds and low humidity, according to the National Weather Service.

Winds are expected to be sustained from about 10 to 25 mph today with gusts of up to 35 mph, the NWS said in a report early this morning.

Humidity is pegged at around 22% to 27%.

“Any fires that develop will be very difficult to control and will likely spread rapidly,” the agency said. “Burn bans are likely in effect so all outdoor burning should be postponed until conditions improve.”

In the southern Plains, meanwhile, red-flag warnings and a fire-weather watch is in effect today into tomorrow morning as dry, windy weather is expected.

Wind speeds are forecast from 15 to 25 mph with gusts up to 40 miles an hour. Relative humidity is expected to fall as low as 10% in southwestern Kansas, the NWS said.

A red-flag warning has been issued for much of southeastern Colorado as well.

“Conditions will be favorable for rapid rates of fire growth and spread this morning and afternoon, and again Tuesday afternoon,” the agency said.

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