3 Big Things Today, September 21, 2020

Soybeans, Corn Lower Overnight; Money Managers Increase Bullish Corn, Bean Bets.

1. Soybean, Grain Futures Decline in Overnight Trading

Soybean and grain futures declined after three straight sessions of gains overnight amid likely profit-taking from investors who’d bet on higher prices.

The price of soybeans on the Chicago Board of Trade hit the highest in more than two years on Friday amid dry weather in much of the Midwest and strong demand. Wheat was near a six-month high last week as well.

With soybeans reaching multiyear highs, investors or hedgers who were long the market, or had bet on higher prices, may be selling contracts and liquidating their positions.

Exporters reported sales of soybeans to China in each of the past 11 trading sessions, according to data from the U.S. Department of Agriculture. Corn sales have also been robust.

The strong demand has led to higher prices, and likely kept losses in today’s overnight session to a minimum.

Also underpinning prices is the fact that no measurable rain has fallen in much of the Midwest in the past week, according to the National Weather Service. Only 41% of the U.S. corn crop was mature as of last week, and 5% had been harvested.

Soybean futures for November delivery fell 5½¢ to $10.38 a bushel overnight on the Chicago Board of Trade. Soymeal lost $1 to $341.10 a short ton, and soy oil dropped 0.33¢ to 34.81¢ a pound.

Corn futures for December delivery fell 2½¢ to $3.76 a bushel.

Wheat futures for September delivery dropped 5¢ to $5.70 a bushel, while Kansas City futures declined 3½¢ to $5.00¾ a bushel.

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2. Speculative Investors Raise Bullish Bets on Corn to Highest in More Than a Year

Money managers were the most bullish they’ve been in more than a year on corn and about two years on beans and wheat in the seven days that ended on Sept. 15, according to the Commodity Futures Trading Commission.

Investors increased their net-long positions, or bets on higher prices, in corn futures to 46,195 contracts last week, the CFTC said in a report.

That’s up from 23,890 contracts a week earlier and the largest bullish position since Aug. 6, 2019.

Speculators also increased their bets on higher prices on soybeans to 189,973 futures contracts, up from 171,268 contracts a week earlier.

That’s the biggest such position since March 13, 2018, U.S. government data show.

Investors have been more positive on corn and beans in recent weeks amid dry weather in the Midwest and as global buyers make purchases from U.S. supplies.

Money managers on Sept. 15 held a net 22,261 hard-red winter wheat futures contracts as of Sept. 15, up from 10,009 contracts a week earlier and the largest bullish position since Oct. 16, 2018, according to the CFTC.

Speculators reduced their net-long positions in soft-red winter wheat to a net 13,950 contracts last week, down from 22,069 a week earlier, marking the smallest such position since Aug. 25.

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3. Weather Warnings Abound as Tropical Storm Beta Heads for Louisiana, Texas Gulf Coasts

Tropical storm, storm surge, and flood warnings are all in effect again along the Louisiana and Texas Gulf coasts as Tropical Storm Beta is set to make landfall, according to the National Weather Service.

Winds are expected to gust up to about 52 mph with seas from 8 to 13 feet offshore, the NWS said in a report. The storm is expected to hit land sometime tonight or early tomorrow morning.

A storm surge warning is in effect: There is potential for water to rise 2 to 4 feet above ground in areas that are prone to flooding, the agency said.

The weather in the Midwest, meanwhile, is expected to remain mostly dry. In parts of Indiana, low humidity and some winds could create fire dangers in central parts of the state today.

There’s also a fire risk in parts of western Nebraska where temperatures around 90°F., along with low relative humidity, will create tinderbox-like conditions, the NWS said.

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