3 Big Things Today, November 2, 2020

Soybeans, Grains Lower Overnight; Speculative Investors Raise Bullish Corn Bets.

1. Soybeans and Grains Lower in Overnight Trading

Soybeans and grains dropped in overnight trading on improving global weather and continued harvest pressure.

Drier, warmer weather is expected in much of the U.S. Midwest this week, according to analysis of weather maps, which likely will help growers harvest the remainder of their crops and do other necessary fieldwork.

About 83% of the U.S. soybean crop was harvested as of last week while 72% of corn was in the bin, according to the Department of Agriculture. The USDA will update its weekly crop progress report today.

Rains continued last week in parts of Brazil and more precipitation in parts of the South American country – the world’s largest exporter of soybeans – this week and next will offer “spotty relief,” Commodity Weather Group said in a report.

In Russia, rain was expected over the weekend and a mild, wet pattern may hold for the next two weeks, which could aid establishment for wheat, CWG said.

Still, demand has been strong for U.S. supplies in recent weeks.

Since the start of the marketing year on Sept. 1, overseas buyers have purchased 30.6 million metric tons of corn, up 168% from the same time frame last year. Soybean sales have jumped 145% year-over-year to almost 47 million metric tons, USDA data show.

Wheat sales since the start of the grain’s marketing year on June 1 now stand at 16.3 million metric tons, up 11% from the same period last year, according to the government.

Soybean futures for January delivery fell 8¾¢ to $10.47½ a bushel overnight on the Chicago Board of Trade. Soymeal rose 40¢ to $379 a short ton, and soy oil lost 0.47¢ to 33.14¢ a pound.

Corn futures for December delivery fell 3¾¢ to $3.94¾ a bushel.

Wheat futures for December delivery were down 4¢ at $5.94½ a bushel in Chicago while Kansas City futures dropped 2¼¢ to $5.39 a bushel.

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2. Speculative Investors Raise Bullish Bets on Corn Futures

Money managers increased their net-long positions, or bets on higher prices, in corn to the highest level in more than four years while reducing their bullish positions in soybeans, according to the Commodity Futures Trading Commission.

Investors held a net-258,738 corn futures contracts in the seven days that ended on Nov. 27, up from 211,575 contracts a week earlier, the CFTC said in a report. That’s also the largest net-long position for corn since June 2016.

Hedge funds and other large investors have been bullish on corn amid improved demand for U.S. supplies.

Speculators lowered their net-longs in soybeans to 223,913 futures contracts last week, down from 227,647 contracts in the previous week, the agency said.

In wheat, money managers held a net-46,390 soft-red winter wheat futures contracts as of Oct. 27, down from 51,848 contracts a week earlier.

Investors increased their bullish bets on hard-red winter wheat to 39,766 futures contracts last week, up from 36,379 contracts seven days prior, the CFTC said in its report.

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. Freeze Warnings in Effect in Oklahoma While Dry Weather Hits Missouri and Illinois

More freeze alerts are in effect to start the week as warnings have been issued from eastern Oklahoma through the Mid-Atlantic region, according to the National Weather Service.

In eastern Oklahoma and northern Arkansas, temperatures overnight fell into the mid-20s and low 30s, the NWS said in a report early this morning.

In southern Illinois, meanwhile, temperatures overnight were expected to fall into the mid-20s, the agency said.

In northern Missouri and central Illinois, meanwhile, strong winds and low humidity likely will create tinderbox-like conditions.

“Elevated fire danger will exist across northeastern and central Missouri and west-central Illinois this afternoon from a combination of low relative humidity (and) gusty southwesterly winds,” the NWS said earlier this morning.

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