3 Big Things Today, September 14, 2020

Corn Futures Higher Overnight; Investors Raise Bullish Bean Bets to Two-Year High.

1. Corn Futures Higher as China Ups Import Expectations

Corn futures were higher in overnight trading to start the week after China said it now expects to import more of the grain in the current marketing year.

The Asian nation’s agriculture ministry said on its website over the weekend that it now expects corn imports in the 2020-2021 marketing year of 7 million metric tons, up from the previous outlook for 5 million metric tons, Reuters reported.

The ag ministry said it sees a “significant increase” in imports from the U.S.

U.S. corn exports in the 2020-2021 marketing year were pegged on Friday by the Department of Agriculture at 2.325 billion bushels, up from the previous month’s outlook for 2.225 billion bushels. That’s also up from the 1.765 billion bushels in the year that ended on Aug. 31.  

Corn futures for December delivery rose 1½¢ to $3.70 a bushel overnight on the Chicago Board of Trade.

Soybean futures for November delivery added 5¢ to $10.01 a bushel. Soymeal gained 40¢ to $325 a short ton, and soy oil rose 0.46¢ to 34.17¢ a pound.

Wheat futures for September delivery gained 1¾¢ to $5.43¾ a bushel, while Kansas City futures rose 2½¢ to $4.73¾ a bushel.

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2. Investors Raise Bullish Bean Bets to Highest in More Than Two Years

Money managers increased their net-long positions in soybeans to the highest level in more than two years and are now solidly bullish on corn, according to the Commodity Futures Trading Commission.

Speculators on Sept. 8 held a net-long position, or bets on higher prices, of 171,268 soybean futures contracts, the CFTC said in a report.

That’s up from 157,149 futures contracts a week earlier and the largest such position since the week that ended on May 1, 2018, the government said in its report.

Investors also raised their net-longs in corn to 23,890 futures contracts last week, up from 8,361 contracts a week earlier and the biggest bullish position since Aug. 6, 2019.

Dry weather in the Midwest and an expanding drought in parts of Iowa and Nebraska continue to threaten yields for both soybeans and corn.

In wheat, money managers raised their net-long positions in hard-red winter wheat futures to 8,746 contracts from 2,865 a week earlier. That’s the biggest such position since April 21.

Soft-red winter wheat was the outlier as investors cut their bullish bets last week. Speculators held 22,069 futures contracts as of Sept. 8, down from 32,151 contracts a week earlier, 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. Red Flag Warning Issued in South Dakota While Tropical Storm Sally Heads For Gulf Coast

A red flag warning, indicating extremely dry conditions, has been issued in much of western South Dakota for this afternoon, according to the National Weather Service.

Relative humidity is expected from 8% to 15% this afternoon along with southwesterly wind gusts up to 30 mph, the NWS said in a report early this morning.

“Hot and breezy weather will support critical fire weather conditions this afternoon into early evening,” the agency said.

Along the Gulf Coast, meanwhile, Tropical Storm Sally is strengthening and expected to become a hurricane today. The storm is forecast to make landfall along the Louisiana, Mississippi, and Alabama coasts tomorrow.

Hurricane, tropical storm and storm surge warnings are all in effect for the affected areas.

“This system has the potential to produce prolific rainfall leading to flash flooding, hurricane force winds, and (a) life-threatening storm surge,” the NWS said.

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