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3 Big Things Today, November 20

Crop Prices Lower Overnight; Money Managers Push Corn Futures to Record Short Position

1. Soybeans, Grains Lower Overnight on Favorable South America Weather

Soybeans and grains were lower, giving back some of Friday’s gains, on favorable growing conditions in South America.

Futures rebounded on Friday, rebounding after the dismal World Agricultural Supply and Demand Estimates (WASDE) report last week. The yo-yo in pricing continues today as prices dropped, though there’s some fundamental backing.

Rainfall in Brazil over the weekend benefited several growing areas in Brazil including Mato Grosso, Parana, and Goias, Commodity Weather Group said. The best rains in the next two weeks are forecast in northern Brazil, where corn, soybeans, and coffee are grown.

The dollar also is a bit higher this morning, which isn’t helping crop prices.

Soybean futures for January delivery fell 5½¢ to $9.85 a bushel overnight on the Chicago Board of Trade. Soymeal declined $1.40 to $316.80 a short ton, and soy oil dropped 0.52¢ to 33.92¢ a pound.

Corn futures for December delivery lost ¾¢ to $3.42¼ a bushel overnight.

Wheat futures fell 4¾¢ to $4.22½ a bushel in Chicago. Kansas City futures dropped 3¾¢ to $4.35¾ a bushel.

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2. Money Managers Push Net-Short Positions in Corn to Record Levels, Less Bullish on Beans

Money managers pushed net-short position, or bets on lower prices, in corn to a record last week while lowering their net-long positions, or bets on higher prices, in soybeans.

Speculators were net-short by 242,884 corn contracts in the week that ended on November 14, according to a report from the Commodity Futures Trading Commission. That’s up from 202,456 contracts a week earlier and the biggest such position ever, CFTC data show.

Investors were net-long 17,269 soybean contracts, down from 45,053 contracts a week earlier, according to the agency.

Specs have gone sour on agricultural commodities in the past few weeks due to the stronger-than-expected yield reports coming out of the Midwest.

Exports have been decent so far this year, but that hasn’t kept investors from increasing their bearish bets in corn and reducing their bullish bets in beans during the harvest.

Wheat contracts, however, showed some signs of life last week as speculators reduced their net-short positions in soft- and hard-red winter futures.

Money managers were net-short by 113,264 soft-red winter contracts last week, down from 128,121 seven days earlier, according to the CFTC. Speculators were net-short by 10,544 hard-red winter contracts, down from 23,547 a week 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. Flooding Expected in Parts of Illinois, Indiana, Ohio After Weekend Rainfall

Flooding is expected in parts of eastern Illinois, Indiana, and Ohio today after several inches of rain fell over the weekend.

The flooding is the worst since July and likely will move into low-lying agricultural land, the National Weather service said in a report early Monday.

“Heavy rainfall Saturday of up to nearly 3 inches, as estimated by radar, fell across northern central Indiana,” the NWS said. “Moderate flooding is expected for a short time in the Lafayette area as the river level comes to a crest very early Monday with a river level 7.2 feet above crest.”

The good news for people in the region is that dry weather is in the forecast and will help bring an end to the flooding, according to the agency.

Still, flooding along some rivers in central and southern Indiana may last into early next week, and additional flood warnings are expected to be issued.

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