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3 Big Things Today, September 12, 2022

Soybeans, Grains Higher Overnight; Investors Raise Bullish Bets in Corn

1. Soybeans, Grains Slightly Higher in Overnight Trading

Soybeans and grains were modestly higher in overnight trading amid adverse weather in parts of the U.S. and as the dollar falls against a basket of global counterparts.

Extremely dry weather is expected in parts of several states in the Corn Belt including western Iowa, eastern Nebraska, central to southern South Dakota and parts of Minnesota, according to the National Weather Service.

Strong winds and low humidity will make for tinderbox-like conditions in the region through Wednesday.

About 57% of the U.S. soybean crop was in good or excellent condition last week, unchanged from the previous week, the Department of Agriculture said in a report. Fifty-four percent of corn earned top ratings, also unchanged week-to-week.

The USDA is scheduled to update its weekly crop progress report today.

The dollar, meanwhile, dropped overnight to the lowest level this month against a basket of its counterparts after the euro jumped to the highest level in six months, according to data from Bloomberg.

The euro rallied amid a hawkish tone from the European Central Bank. More fiscal tightening is likely as the ECB attempts to slow inflation in the bloc.

A weaker dollar means cheaper prices for importers of dollar-denominated goods including some agricultural products, which could spur demand for U.S. supplies.

Soybean futures for November delivery rose 3 3/4¢ to $14.16 a bushel overnight on the Chicago Board of Trade. Soymeal added $2.80 to $413.50 a short ton, while soybean oil gained 0.11¢ to $64.93 a pound.

Corn futures for December delivery were up 1/2¢ to $6.85 ½ a bushel.

Wheat gained 4 1/2¢ to $8.74 a bushel, while Kansas City futures rose 3 1/2¢ to $9.32 3/4 a bushel.

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2. Investors Raise Bullish Bets in Corn, Reduce Net-Longs in Beans

Speculative investors raised their net-long positions, or bets on higher prices, on corn to the highest level in more than two months while reducing bullish bets on beans, according to data from the Commodity Futures Trading Commission.

Money managers held a net-210,231 futures contracts in corn in the seven days that ended on Sept. 6, the CFTC said in a report.

That's up from 205,208 contracts a week earlier and the highest level since June 28.

In soybeans, meanwhile, investors cut their net-longs to 99,569 futures contracts last week, down from 104,149 contracts the previous week. That's the smallest such position since July 26, the government said.

Hedge funds and other large investors reduced their bullish bets on hard-red winter wheat to a net-11,052 futures contracts. That's down from 11,793 contracts a week earlier and the weakest net-long position since Sept. 15, 2020, agency data show.

Investors were less bearish on soft-red winter wheat last week, reducing their net-short positions, or bets on lower prices, to 23,434 contracts from 23,935 contracts seven days earlier.

That marks the smallest such position in almost a month, the CFTC 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. Flood Warnings in Effect `Until Further Notice' in Southern Wisconsin, Northern Illinois

Flood warnings and watches remain in effect in parts of southern Wisconsin and northern Illinois after storms stationed over the region for the past 24 hours, according to the National Weather Service.  

Rivers have overrun their banks near Milwaukee, and a flood warning remains in effect "until further notice," the NWS said in a report early this morning.

The Oak Creek in south Milwaukee is at 9.4 feet. Flood stage is 8 feet, and anything above 9.1 feet is considered a "1% chance flood," meaning there's only a 1% chance that the river would ever reach that level, the agency said. The river earlier reached just shy of 10 feet.

Flood watches are in effect until 1 p.m. this afternoon in nearby counties in southern Wisconsin and northern Illinois. Excessive runoff could result in more flooding, the NWS said.

Further west in parts of northwestern Iowa, southwestern Minnesota, northeastern Nebraska and southeastern South Dakota, extremely dry weather may lead to wildfires, the agency said.

"Increasing southerly winds and warming temperatures could result in areas of elevated fire danger by Wednesday, especially near and west of the I-29 corridor," the NWS said.

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