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3 Big Things Today, October 15

Soybeans, Corn Lower in Overnight Trading; Money Managers Cut Bearish Bets Last Week.

1. Soybeans, Corn Modestly Lower in Overnight Trading

Soybeans were slightly lower in overnight trading Monday amid drier weather in parts of the Midwest and concerns about the seemingly never-ending trade dispute between the U.S. and China.

Dry weather – though extremely cold in some areas – in parts of the Corn Belt are allowing some farmers back into their fields after weeks of rainfall. Parts of northern Illinois are forecast to see more dry weather for at least three days, which may accelerate the harvest there.

Still, some areas are now receiving snow, which may keep producers out of their fields.

The ongoing trade war between the U.S. and China, which used to be the biggest buyer of U.S. soybeans, has no end in sight. Neither side was willing to make concessions in negotiations last month, and formal talks have ceased.

That doesn’t bode well for soybean exporters, though other countries have stepped up purchases in light of low prices including the Netherlands, which lately is near the top of USDA export sales reports.

Soybeans for November delivery fell 1¾¢ to $8.65¾ a bushel overnight on the Chicago Board of Trade. Soy meal futures declined $1.40 to $315.50 a short ton, and soy oil lost 0.04¢ to 29.35¢ a pound.

Corn for December delivery fell 1¾¢ to $3.72 a bushel overnight.

Wheat for December delivery rose ¼¢ to $5.17½ a bushel overnight, while Kansas City futures gained ¼¢ to $5.24½ a bushel.


2. Money Managers Reduce Bearish Positions in Corn, Soybeans  

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

Speculators were net short by 39,399 corn futures contracts as of October 9, down from 67,387 contacts a week earlier, the CFTC said in a report. That’s the smallest such positions since June.

Investors were net short by 39,691 soybean futures contracts last week, down from 42,878 contracts seven days earlier. That’s also the smallest net-short position since June.

Speculative investors have been reducing their bearish positions in corn and soybeans in recent weeks amid ongoing harvest delays due to incessant rain in the Midwest. That’s led to reports of quality issues in some areas where as much as six times the normal amount of precipitation has fallen in the past two to three weeks.

While it’s dried out in some parts of the Corn Belt, snow is now falling in areas, which could lead to further delays.

Money managers, however, increased their net-short positions in soft red winter wheat to 18,098 futures contracts as of last week, up from 11,708 contracts. That’s the biggest net-short positions since May 1, according to the CFTC.

Investors were still bullish on hard red winter wheat, however, though they reduced their net-long positions to 20,272 futures contracts from 22,851 the prior week, marking the smallest bullish stance on the grain since the seven days that ended on July 24.

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.


3. Wet Weather Turns to Freezing Weather in Parts of Plains, Central Midwest

Cold, snowy weather has taken over in much of the Southern Plains and central Midwest, according to the National Weather Service.

Freeze warnings are in effect from the Texas panhandle northeast into northern Illinois, the NWS said in a report early Monday morning.

In southwestern Kansas, a hard freeze has occurred as temperatures are hovering between 21˚F. and 28˚F., which is cold enough to stop plant growth. Generally, anything 28˚F. and under for an extended time will halt maturity.

About 58% of the Kansas wheat crop was planted as of last Sunday, and the USDA will update progress in a weekly report today.

In parts of eastern Iowa and western Illinois, a freeze warning will be in effect until 9 a.m. tomorrow morning, as temperatures will fall into the upper 20s and lower 30s overnight, the NWS said. In eastern Nebraska, meanwhile, several inches of snow fell in some areas, leaving thousands without power.

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