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3 Big Things Today, November 12

Soybeans Lower in Overnight Trading; Money Managers Cut Bearish Bean Bets

1. Soybeans Slightly Lower, Grains Modestly Higher Overnight

Soybeans were lower while grains were little changed in overnight trading as investors keep an eye on export sales, the ongoing harvest, and trade relations between the U.S. and China.

Sales of soybeans in the week that ended on November 1 were down 2% on a weekly basis but up 16% from the prior four-week average, while corn sales continued to impress, rising 78% week to week and 32% from the previous average, according to the USDA. Wheat sales were up 14% week to week and 47% from the average, the USDA said in a report last week.

The USDA will release its Weekly Crop Progress Report this morning, with analysts expecting the agency to report the soybean crop 90% harvested, up from 83% last week, corn 88% collected vs. 76% seven days earlier and winter wheat planting at 90% finished, up from 83% a week earlier.

Leaders from both the U.S. and China have expressed interest in meetings to resolve the ongoing trade war between the countries, but a quick end to the dispute isn’t likely. Still, any movement is positive for soybeans, whose sales have plummeted in recent months due to the lack of buying from China.

Soybeans for January delivery fell 2¾¢ to $8.84 a bushel overnight on the Chicago Board of Trade. Soy meal futures gained 60¢ to $306.20 a short ton, and soy oil rose 0.06¢ to 27.68¢ a pound.

Corn futures for December delivery rose 1¼¢ to $3.71 a bushel overnight.

Wheat for December delivery gained 3¢ to $5.05 a bushel, while Kansas City futures rose 1¢ to $4.88½ a bushel.

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2. Money Managers Cut Bets on Lower Soybean Prices by 44% Last Week

Money managers cut their net-short positions, or bets on lower prices, in soybeans by 44% in the seven days that ended on November 6 while modestly increasing their bullish corn bets.

Investors were net short by 38,866 soybean futures contracts last week, down from 69,915 contracts a week earlier, according to the Commodity Futures Trading Commission. That’s the smallest bearish position for soybeans in four weeks.

Speculators held 14,562 net-long positions, or bets on higher prices, in corn last week, up from 11,570 futures contracts seven days earlier, the CFTC said in a report.

Corn demand has been exceptionally strong in the past few months. Accumulated exports since the start of the marketing year on September 1 are up 85% from the same period a year earlier, according to the USDA.

Investors may be less bearish on soybeans as trade tensions between the U.S. and China are starting to show signs of cooling, with leaders from both countries expressing interest in working out a trade deal.

Money managers also reduced their bearish positions in soft red winter wheat, dropping net shorts to 41,965 futures contracts from 47,928 contracts a week earlier, the CFTC said.

Speculators were still bullish hard red winter wheat, holding a net-long position of 6,966 futures contracts last week vs. 6,723 seven days earlier.

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. Winter Weather Advisory in Effect From New Mexico to Illinois on Monday

A winter weather advisory is in effect for a wide patch of land stretching from central New Mexico northeast into extreme western Illinois, according to the National Weather Service.

In the Texas and Oklahoma panhandles, heavy snow is already occurring with up to 3 inches of accumulation expected. A winter storm warning is in effect for the area until noon., the NWS said in a report early Monday morning.

Wind gusts of up to 35 mph will cause snow to blow and drift.

Farther east in eastern Kansas and western Missouri, two separate sets of winter weather are expected today.

The first round of snow lasted into the early morning hours of Monday, but have moved off to the east, while another storm is expected to arrive later this afternoon, which should last into early evening, the NWS said. Slick roads are possible as temperatures will fall well below freezing overnight into Tuesday morning, the agency said.

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