3 Big Things Today, November 9, 2020

Soybeans Higher Overnight; Investors Raise Bullish Corn Bets to Six-Year High.

1. Soybeans Higher Overnight While Grains Slightly Lower

Soybeans were higher in overnight trading on strong Chinese demand and concerns about dry weather in South America while corn and wheat were down modestly.

China’s soybean imports in October jumped 41% year-over-year, Reuters reported, citing customs data released Saturday. The Asian nation has increased purchases from both the U.S. and Brazil.

In October, China bought almost 8.7 million metric tons of soybeans, the report said.

The U.S. Department of Agriculture said in a report Friday that China bought 132,000 metric tons of soybeans and an unnamed buyer purchased 272,150 tons.

An unknown destination also took 206,900 metric tons of corn, and South Korea bought 30,000 tons of soybean oil, the USDA said.

Crop stress is expected to expand into about 35% of Brazilian growing areas this week before retracting again next week due to dry weather in the world’s largest exporter of soybeans, according to Commodity Weather Group.

In Argentina, about 20% of corn and soybean areas are facing dry weather.

Rain next week in both Brazil and Argentina next week should alleviate some of the stress, CWG said.

The projection that Democratic former Vice President Joe Biden won the U.S. presidential election doesn’t seem to be having much effect on prices overnight after a lengthy counting process that dragged through most of last week.

Soybean futures for January delivery rose 7¼¢ to $11.08¾ a bushel overnight on the Chicago Board of Trade. Soymeal gained $3.20 to $385.60 a short ton, and soy oil added 0.23¢ to 35.57¢ a pound.

Corn futures for December delivery fell 1¾¢ to $4.05 a bushel.

Wheat futures for December delivery lost 1½¢ at $6.00½ a bushel in Chicago while Kansas City futures declined ½¢ to $5.54¾ a bushel.

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2. Speculators Extend Net-Long Positions in Corn to Highest Level Since 2014

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

Hedge funds and other large investors raised their net-longs in corn to 270,396 futures contracts in the seven days that ended on Nov. 3, the CFTC said in a report.

That’s up from 258,738 contracts a week earlier and the largest such position since May 6, 2014, government data show.

Strong demand for U.S. supplies has kept investors bullish on corn for the past several months.

Speculators, however, reduced their net-long positions in soybeans last week to 204,276 futures contracts, down from 223,913 contracts a week earlier, the agency said.

That’s the smallest bullish position since the seven days that ended on Sept. 15.

In wheat, money managers increased their net-longs in hard-red winter futures to 47,207 contracts last week, up from 46,390 contracts seven days earlier, the CFTC said.

Investors raised their bullish positions in hard-red winter futures to 45,160 futures contracts as of Nov. 3, up from 41,817 contracts a week earlier, the agency 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. Winter Weather Expected in Nebraska While Dryness in Kansas Gives Way to Thunderstorms

A winter weather advisory is in effect for some counties in northern Nebraska this morning as rain, sleet, and snow move into the region, according to the National Weather Service.

Mixed precipitation is expected through about midday in the region, which will make roads slippery, the NWS said in a report early this morning.

Up to an inch of snow is expected along with a light glaze of ice, the agency said.

Much of northern Nebraska and southern South Dakota likely will see rain transition to freezing rain and sleet before turning to snow this morning. More snow is possible tonight, though less than 2 inches are expected.

In the southern Plains, where hard-red winter wheat is growing, dry weather this afternoon will give way to potentially severe thunderstorms heading into the evening hours.

“Strong to marginally severe thunderstorms will be possible in south-central and eastern portions of southwest Kansas late this afternoon into the evening,” the NWS said. “The strongest storms will be capable of up to quarter-size hail and gusty winds up to 60 mph.”

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