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3 Big Things Today, May 25, 2020

Grain Trading Closed Monday; Investors Raise Bearish Bets on Corn

1. Grain, Soybean Trading Closed For Memorial Day

Grain and soybean markets are closed in observance of Memorial Day. Overnight trading will resume at 7 p.m. central time.

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2. Speculators Increase Net-Short Position in Corn, Turn Less Bullish on Beans

Money managers increased their net-short positions, or bets on lower prices, in corn last week to the highest level in a year, according to the Commodity Futures Trading Commission.

Investors held a net-short of 246,059 corn futures contracts in the seven days that ended on May 19, the CFTC said in a report. That’s up from 214,679 contracts a week earlier and the highest level since May 14, 2019.

Speculators were still held net-long positions, or bets on higher prices, on soybeans last week.

They held a net-long of 11,985 soybeans futures contracts last week, down from 31,037 contracts a week earlier, government data show.

Hedge funds and other large money managers have turned more bearish on corn and less bullish on soybeans amid concerns about demand during the COVID-19 pandemic.

China has made purchases in recent weeks as part of its commitment to buy U.S. agricultural products, but some traders are worried that demand destruction has occurred due to the spread of the disease. Still, with countries and states reopening, there’s hope that demand will return.

In wheat, investors turned negative on soft-red winter futures, holding a net-short position of 11,390 futures contracts last week.

That’s shift from a net-long position of 6,215 futures contracts seven days earlier.

Speculators also turned bearish on hard-red winter wheat, holding a net-short position of 15,103 futures contracts as of May 19. That’s a turn from the prior week’s net-long position of 3,549 contracts, 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.


3. Flood Warnings and Advisories in Effect From Nebraska to Louisiana

Flood warnings and advisories are in effect for a large chunk of land stretching from central Nebraska into western Louisiana this morning, according to the National Weather Service.

Flash flood warnings have been issued for counties in central Nebraska and north-central Kansas as thunderstorms produced heavy rain in the region.

As much as 5 inches of rain fell – some was locally higher – in a short amount of time, and the precipitation is ongoing, though decreasing in intensity, the NWS said in a report early this morning.

Creeks and streams along with low-lying fields and roadways are likely to flood in the affected areas.

Much of the rest of the Midwest into western Louisiana are under flash flood warnings and watches due to the excessive precipitation, the agency said.

“Periods of heavy rainfall on already saturated soils could lead to flash flooding,” the NWS said. “Rainfall is expected to gradually diminish later today.”

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