3 Big Things Today, November 23, 2020

Grain, Soybean Futures Gain Overnight; Investors Reduce Net-Long Positions.

1. Grain and Soybean Futures Higher in Overnight Trading

Grains and soybeans were higher in overnight trading amid ongoing concerns about dry weather in South America.

Several states in Brazil are still facing dry weather including Rio Grande do Sul, Parana, and Mato Grosso do Sul, according to Commodity Weather Group.

Some showers that were projected in northern and central Brazil are “critical,” but a third of the country’s corn and soybean areas are already facing long-term deficits, the forecaster said.

CWG said in a report that 10% of Argentina’s crop areas are “notably dry,” though that could expand in the next two weeks. Still, some showers are in the forecast this week.

Demand for U.S. supplies has cooled in recent days, though the Department of Agriculture said on Friday that exporters sold 158,270 metric tons of corn to Mexico for delivery in the marketing year that started on Sept. 1 and 131,000 tons to an unnamed country.

Importers of U.S. supplies since the beginning of September have promised to buy 35.3 million metric tons of corn, a 166% jump from the same time frame in 2019.

Overseas buyers also have committed to purchase 51.3 million metric tons of soybeans, up 117% from the same period a year earlier, the department said in a weekly report.

Wheat sales since the start of the grain’s marketing year on June 1 are now at 17.4 million metric tons, an 11% year-over-year increase, the USDA said.

Corn futures for December delivery gained 6¼¢ to $4.34½ a bushel overnight on the Chicago Board of Trade.  

Wheat futures for December delivery rose 7½¢ to $6.07 a bushel while Kansas City futures added 4½¢ to $5.63¾ a bushel.

Soybean futures for January delivery jumped 15¢ to $11.96 a bushel overnight. Soymeal was up $4.40 to $399.10 a short ton, and soy oil added 0.51¢ to 38.85¢ a pound.

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2. Speculative Investors Reduce Net-Long Positions in Beans, Corn

Money managers reduced their net-long positions, or bets on higher prices, in both soybeans and corn last week, according to the Commodity Futures Trading Commission.

Investors in the seven days that ended on Nov. 17 held a net-long of 200,123 soybean futures contracts, down from 211,980 contracts a week earlier, the CFTC said in a report.

That’s the smallest such position since the seven days that ended on Sept. 15, the agency said.

Speculators also curbed their bullish bets on corn modestly, reducing their net-longs to 268,110 futures contracts. That’s down from a net of 268,825 contracts the previous week and the smallest bullish position since Oct. 27.

In wheat, fund managers and other large investors held a net-long position of 13,479 soft-red winter futures.

That’s the smallest such position since Sept. 29 and down significantly from the previous week’s 31,513 contracts, the CFTC said.

Money managers also held a net-long of 46,276 hard-red wheat futures contracts, up from 45,588 contracts a week earlier. That’s up from 45,588 contracts the previous week, according to the government.

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. Strong Winds and Wintry Mix Expected in Parts of Upper Midwest Monday

Strong winds are expected in parts of Nebraska, southern South Dakota, southwestern Minnesota, and northwestern Iowa today, according to the National Weather Service.

Winds are expected to gust up to 35 mph, the NWS said in a report early this morning.

Rain is forecast to start this afternoon and last into early Tuesday, while a mix of rain and snow may fall early tomorrow morning. Any accumulations will be light, the agency said.

In northern Indiana, meanwhile, there’s a chance of a wintry mix of precipitation overnight.

“There will be a chance for precipitation late tonight, some of which could fall as a wintry mix in spots,” the NWS said. “Relatively warm ground temperatures should limit any impact and keep roads from becoming more than wet.”

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