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3 Big Things Today, October 29

Soybean Futures Higher Overnight; Money Managers Bullish Corn, Bearish Beans.

1. Soybeans Rise on Reports New China Policy Unenforceable

Soybeans were higher in overnight trading Monday after Chinese traders said a new government policy meant to curb consumption was unenforceable.

China has been seeking ways to reduce soybean and soy meal consumption amid an ongoing trade war with the U.S. The Feed Industry Association said Friday it had approved new standards for animal feed, lowering protein levels by 1.5 percentage points for pigs and 1 point for chickens, according to a statement from the Ministry of Agriculture.

The government said Friday the new regulations would curb consumption by 14 million tons.

One soybean trader, however, told Reuters that the new guidelines were not enforceable. Another said rising prices have already curbed consumption and that mills were able to find substitutes.

Soybeans for November delivery rose 5½¢ to $8.50½ a bushel overnight on the Chicago Board of Trade. Soy meal futures added $2.60 to $309.90 a short ton, and soy oil gained 0.16¢ to 28.32¢ a pound.

Corn futures gained 1½¢ to $3.69¼ a bushel overnight.

Wheat for December delivery rose 2½¢ to $5.07¾ in Chicago, while Kansas City futures added 3¢ to $5.03¼ a bushel.

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2. Money Managers Betting on Corn Prices to Rise, Soybean Futures to Decline

Money managers were more bullish on corn but also increased their bearish bets on soybeans in the week that ended on October 23.

Speculators held net-long positions, or bets on higher prices, of 27,903 corn futures contracts as of last week, the biggest bullish position since the week that ended on June 5, according to the Commodity Futures Trading Commission.

That’s also up from 21,258 futures contracts a week earlier.

Investors, meanwhile, increased their net-short positions, or bets on lower prices, in soybeans to 39,279 futures contracts, the CFTC said in a report. That’s up from 31,112 contracts seven days earlier, government data show.

Fund managers and other large speculative investors have been weighing potential damage from incessant rain that slowed the harvest against already-high domestic and global corn and soybean production.

Since the rains dissipated a couple of weeks ago, producers have been able to accelerate collection of their crops, also weighing on prices.

Investors were still bullish on hard red winter wheat, holding 17,106 net-long positions, though that’s down from 22,291 futures contracts the previous week and the smallest bullish position since the seven days that ended on July 17, according to the CFTC.

Speculators increased their net-short positions in soft red winter wheat to 30,023 futures contracts last week, almost double the 16,252 positions seven days earlier. The figure is also the largest bearish position since April 24, the government 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. Isolated Thunderstorms Forecast For Parts of Eastern Iowa, Western Illinois

Isolated thunderstorms are expected in parts of eastern Iowa and western Illinois where flooding along the Mississippi River continues.

The storms are expected to roll through after 3 a.m. overnight, bringing rain and lighting to the region, according to the National Weather Service. Thunderstorms likely will stick around until Tuesday afternoon, the NWS said in a report early Monday morning.

Flooding along the Mississippi River is still an issue as the river at Muscatine, Iowa, was at 16.2 feet, just above its flood stage of 16 feet. At Burlington, the river was at 16.8 feet, well above flood stage of 15 feet, the NWS said.

On the other side of Iowa, the Missouri River along the state’s border with Nebraska also is flooding. The Missouri is expected to continue to flood from just north of Omaha south past Rulo, the NWS said.

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