3 Big Things Today, October 5, 2020

Wheat Futures Rise Overnight; Speculators Boost Bullish Bets on Corn, Beans.

1. Wheat Futures Higher Overnight on Adverse Global Weather

Wheat futures were higher in overnight trading amid dry weather in several global growing areas.

Dry weather is expected in much of the U.S. southern Plains for at least the next week or two, according to the National Weather Service.

Commodity Weather Group said in a report that wheat in the Plains may see rain in the 11- to 15-day outlook but dry weather likely will hinder growth in a third of the Wheat Belt.

Little to no rain has fallen in much of Kansas, Oklahoma, and the Texas panhandle in the past two weeks, data from the NWS show.

About 35% of the U.S. winter wheat crop was planted as of last week, up from the prior five-year average of 33%, according to the Department of Agriculture. The USDA will update its weekly crop progress report today.

CWG said in its report that much of Russia’s wheat-producing areas likely will remain dry for the next two weeks with “poor growing conditions,” while stress builds in Argentina.

Wheat futures for December delivery rose 8½¢ to $5.81¾ a bushel overnight on the Chicago Board of Trade, while Kansas City futures dropped 9¼¢ to $5.18¾ a bushel.

Corn futures fell ¼¢ to $3.79½ a bushel overnight.  

Soybean futures for November delivery fell 1¾¢ to $10.19 a bushel. Soymeal lost $1.30 to $350.60 a short ton, and soy oil rose 0.03¢ to 31.69¢ a pound.

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2.  Speculators Extend Bullish Bets in Soybeans and Corn

Money managers extended their net-long positions, or bets on higher prices, in soybeans to the highest level in about eight years while boosting their bullish bets on corn to the largest in more than 13 months, according to the Commodity Futures Trading Commission.

Speculators held a net-long of 224,902 soybean futures contracts in the seven days that ended on Sept. 29, the CFTC said in a report.

That’s up from 211,590 contracts a week earlier and the largest level since 2012, government data show.

Investors held a net-long position of 84,748 corn futures contracts last week, up from 81,815 contracts a week earlier and the biggest such position since the week that ended on July 30, 2019, government data show.

Hedge funds and other large money managers have been extending their bullish bets on soybeans and corn in recent weeks amid strong demand for U.S. agricultural products.

In wheat, specs held a net-long position of 10,129 contracts in soft-red winter futures, down from 13,234 a week earlier. That’s the smallest such position since the seven days that ended on Aug. 25, the CFTC said.

Investors were net long by 17,870 hard-red winter wheat contracts last week, down from 18,109 seven days 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. Frost Advisories Issued in Western Corn Belt While Fire Danger Persists in Nebraska

Frost advisories have been issued for a large chunk of the eastern Midwest from central Wisconsin southwest into southern Missouri and east through Michigan, according to the National Weather Service.

In eastern Iowa and northern Illinois, temperatures overnight fell into the mid-30s, the NWS said in a report early this morning.

In southern Michigan and northern Indiana, temperatures were down as low as 33°F., the agency said.

Farther west, a red-flag warning has been issued for the western half of Nebraska, several counties in northwestern Kansas, and much of eastern Colorado.

In west-central Nebraska, relative humidity is expected to drop as low as 20% today while winds are forecast from 15 to 25 mph with gusts of up to 35 mph, the NWS said.

Temperatures in the area today are expected to be in the lower 80s, the agency said.

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