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3 Big Things Today, May 14

Wheat Futures Lower in Overnight Trading; Money Managers Boost Net Longs in Corn.

1. Wheat Falls as U.S. Production Set to Rise 5% in 2018-2019

Wheat futures dropped to a two-week low overnight amid rising U.S. output of spring and durum varieties.

All wheat production for the 2018-2019 marketing year that starts on June 1 is pegged at 1.821 billion bushels, up 5% from the prior 12 months and well above analyst estimates, the USDA said in a report last week.

Use will rise 3% in the next marketing year.

The U.S. winter wheat crop has been devastated by drought, but a 34% increase in spring and durum output due to increases in yield and acreage will more than compensate for lost production in the Southern Plains, according to the government.

Wheat for July delivery fell 5¢ to $4.93¾ a bushel overnight on the Chicago Board of Trade. Kansas City futures lose 3½¢ to $5.14½ a bushel.

Corn futures lost a penny to $3.95½ a bushel.

Soybeans bucked the trend, rising overnight. Futures for July delivery rose 2½¢ to $10.05¾ a bushel overnight. Soy meal gained $1.20 to $379.80 a short ton, while soy oil lost 0.05¢ to 31.26¢ a pound.

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2. Money Managers Increase Bullish Bets on Corn, Reduce Net Longs For Soybeans                    

Money managers last week increased their bullish bets on corn while lowering their net-long positions in soybeans.

Speculators held 206,147 net-long positions in corn as of May 8, up from 186,276 a week earlier and the biggest such position since the seven days that ended on March 20, the Commodity Futures Trading Commission said in a report.

Investors were net long soybean futures by 122,465 contracts last week, the CFTC said. That’s well below the prior week’s 178,282 contracts, and the smallest net-long positions since February 26.

Investors are likely more bullish on corn and less bullish on soybeans after the USDA last week forecast corn acres would trail soybean plantings.

Net-long positions in hard red winter wheat rose to 47,865 futures contracts as of May 8, up from 38,660 a week earlier, as dry weather continues to curb production of the U.S. crop.

Soft red winter wheat investors held a net-short position of 12,585 contracts, down from 18,940 contracts seven days earlier, according to the CFTC.

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. Flood Watches Forecast For Michigan, Dry Thunderstorms Expected in Southern Plains

Flood watches are in effect for much of southern Michigan this morning, according to the National Weather Service.

Rainfall in the past few days has totaled 1½ to 3 inches south of Interstate 96 with more on the way, the NWS said in a report early Monday morning. More showers are forecast starting early this morning and lasting through at least Tuesday morning.

An addition 1 to 3 inches are expected, which may lead to flooding, the agency said.

“Ponding of water is possible in low-lying areas like ditches, culverts, and fields,” the NWS said. “River and stream rises are likely with some areas exceeding” their banks.

Meanwhile, in the Southern Plains, thunderstorms are expected in the eastern parts of the Oklahoma and Texas panhandles that may become severe this afternoon.

Despite the storms, the biggest threats are strong winds and large hail, but the NWS didn’t mention much rain. Last week, it forecast “dry lightning” for the area.

In the absence of rainfall, fire weather conditions will develop across the Texas panhandle today and tonight, the agency said. Thunderstorms are likely all week, but if they develop, damaging winds, hail, and potential fire hazards are possible, according to the NWS.

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