3 Big Things Today, October 8
1. Grains, Beans Lower Amid Overbought Conditions
Corn, beans, and wheat all turned lower in overnight trading despite bullish fundamental factors, likely on technical selling.
While the corn market still looks positive, momentum indicators show futures are “deeply into the overbought range, and that is bound to limit grains without some correction,” said Tomm Pfitzenmaier, the head of Summit Commodities in Des Moines, Iowa.
Investors are likely focused on how the crop has progressed with all the rain the past week in the Midwest and trade expectations ahead of Thursday’s World Agricultural Supply and Demand Estimates report from the USDA.
Corn futures for December delivery fell 2¼¢ to $3.66 a bushel overnight on the Chicago Board of Trade.
Soybeans for November delivery lost 2½¢ to $8.66½ a bushel. Soy meal futures lost $1 to $318.60 a short ton, and soy oil fell 0.27¢ to 29.14¢ a pound.
Wheat for December delivery dropped 3½¢ to $5.17½ a bushel overnight, while Kansas City futures declined 4¼¢ to $5.20 a bushel.
2. Money Managers Less Bearish on Corn, Beans as Rainfall Slows Harvest
Money managers were less bearish on corn and soybeans in the week that ended on October 2, as wet weather keep U.S. farmer from collecting their crops.
Speculators held 67,387 net-short positions, or bets on lower prices, in corn futures contracts, about half of the prior week’s 124,855 contracts, according to the Commodity Futures Trading Commission. That’s the smallest net-short position since August 21, CFTC data show.
Investors were net short by 42,878 soybean futures contracts last week, down from 60,126 contracts seven days earlier. That’s also the smallest such position since the week that ended on August 21, the government said in a report.
As much as six times the normal amount of precipitation has fallen in the past two weeks in parts of the Corn Belt, according to the National Weather Service. Flooding has been an ongoing problem in much of eastern Iowa, and more rain fall over the weekend, the NWS said.
About 26% of the U.S. corn crop was harvested as of Sept.ember 30, while 23% of soybeans were collected, the USDA said last week. The agency will update its Crop Progress Report tomorrow, a day late due to the observance of Columbus Day, according to the USDA.
Fund managers and other large investors turned bearish on soft red winter wheat, however, moving to a net-short position of 11,708 futures contracts. That’s the biggest such position since the seven days that ended on June 26.
A week earlier, they held 227 net-long positions, or bets on higher prices, the CFTC said.
Investors were still bullish on hard red winter wheat, however, holding 22,841 net-long futures contracts. Still, that’s down from 28,676 contracts a week earlier and the smallest bullish position since the seven days that ended on July 24, according to the government.
3. Flood Warnings, Flash Flood Watches in Effect From Southern Texas to Northern Wisconsin
Flood warnings and flash flood watches are in effect for a band stretching from southwestern Texas all the way into northwestern Wisconsin, according to the National Weather Service.
A flash flood warning is in effect for several counties along the Kansas-Missouri border due to excessive rainfall in the area, the NWS said in a report early Monday morning.
“A few roadways have been barricaded due to high water,” the agency said. Parts of Kansas City, Overland Park, Olathe, and several other cities likely will see flooding today. “Additional rainfall amounts of 1 to 2 inches are possible in the warned area.”
In eastern Iowa, where flooding has been an ongoing problem the past couple of weeks, it’s more of the same to start the week.
Rain and thunderstorms are possible throughout the entire area today and tonight. Heavy rains are most likely this afternoon along and east of the Mississippi River, the NWS said. Flash flood watches are in effect for much of the region.
“Warm, moist air aloft will allow for thunderstorms to bring heavy rainfall, with rains tonight possibly between 1 and 3 inches,” the service said. “This rain will lead to flash flooding and increased river flooding.”