3 Big Things Today, October 12, 2020

Soybeans, Corn Higher Overnight; Investors Bump Bullish Bean Bets.

1. Soybeans and Grains Higher Overnight After WASDE

Soybean and grain futures were higher in overnight trading after the U.S. Department of Agriculture lowered its outlook for corn and bean stockpiles and production.

The USDA in its monthly World Agricultural Supply and Demand Estimates, or WASDE, report on Friday pegged corn stockpiles at the end of the 2020-2021 marketing year at 2.167 billion bushels.

That’s down from the 2.503 billion bushels it had projected a month earlier. Consensus of analysts was for 2.102 billion bushels, according to researcher Allendale.

Soybean inventories are now seen at 290 million bushels, well below the 460 million September forecast, the agency said, and lower than estimates for 352 million.

Wheat inventories were pegged at 883 million bushels, down from 925 million projected last month by the USDA and estimates for 887 million bushels.

The government’s corn production estimate fell to 14.722 billion bushels on yield of 178.4 bushels an acre, down from 14.9 billion and 178.5 bushes, respectively.

Soybean output is now seen at 4.268 billion bushels, down from September’s estimate for 4.313 billion, on yield of 51.9 bushels an acre, which was unchanged month-to-month.

Soybean futures for November delivery rose 2½¢ to $10.68 a bushel overnight on the Chicago Board of Trade. Soymeal fell 30¢ to $363.50 a short ton, and soy oil gained 0.12¢ to 34.13¢ a pound.

Corn futures for December delivery rose 3½¢ to $3.98½ a bushel.

Wheat futures for December delivery added 2¾¢ to $5.96½ a bushel in Chicago, while Kansas City futures were up 3½¢ to $5.39 a bushel.

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2.  Speculators Push Bullish Bean Bets to Record High, CFTC Says

Money managers raised their net-long positions, or bets on higher prices, on bean and corn futures last week, according to the Commodity Futures Trading Commission.

Investors raised their bullish bets on beans to a net 230,746 futures-only contracts in the seven days that ended on Oct. 6, the CFTC said in a report. That’s up from 224,902 contracts a week earlier and reportedly the highest on record.

Speculators also raised their net longs in corn, which jumped to 117,284 futures contracts last week, up from 84,748 seven days earlier, the agency said.

That’s the largest such position for corn since July 2019.

Net-long positions in soft-red winter wheat surged to 28,097 futures contracts last week, almost triple the previous week and the largest such position since the end of March.

Investors also bumped their bullish bets on hard-red winter wheat to a net 26,563 futures contracts from 17,870 a week earlier, the CFTC said.

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. Red Flag Warnings Issued in Nebraska, Colorado, and Kansas Monday

It’s quite dry in the western half of Nebraska, eastern Colorado, and counties in western Kansas, as a red-flag warning has been issued for the region, according to the National Weather Service.

Relative humidity in southwestern Nebraska is expected to be around 11% with winds sustained from 15 to 25 mph and gusts up to 40 mph, the NWS said in a report early this morning.

“A combination of strong winds, low relative humidity, and warm temperature can contribute to extreme fire behavior,” the agency said.

Fires also are a risk in parts of eastern Iowa and northern Illinois as winds are forecast to gust around 35 mph with low humidity levels, the NWS said.

Gusty winds of up to 40 mph are expected late this morning and early this afternoon.

Still, an isolated thunderstorm is possible through midmorning in parts of eastern Iowa, the NWS said.

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