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3 Big Things Today, September 24

Soybeans Lower in Overnight Trading; Speculators Push Bearish Bean Bets to Eight-Month High

1. Soybeans Decline on Worries About Record Output, Stocks

Soybeans declined, following last week’s strong showing, in overnight trading as the harvest is set to begin in the U.S., causing concern about increasing global supplies.

Growers are expected to harvest 4.693 billion bushels of soybeans this year on yields of 52.8 bushels an acre, both record highs, according to the U.S. Department of Agriculture. Domestic stockpiles are expected to jump to 845 bushels an acre, more than double last year’s total.

About 6% of the crop was harvested as of last week, double the average for this time of year, the USDA said in its weekly progress report, which is scheduled to be updated today.

Globally, production is pegged at a record 369.3 million metric tons, up from 336.8 million a year earlier, while inventories are forecast to jump to 108.3 million tons from 94.7 million, the USDA said.

Producers and traders alike are going to be watching the weather, fund positioning, and trade developments to determine whether they should take profits after last week’s 17¢ bump in futures, Allendale said in a note to clients early Monday.

Soybean futures for November delivery fell 7¼¢ to $8.40 a bushel overnight on the Chicago Board of Trade. Soymeal was unchanged at $308.90 a short ton, and soy oil declined 0.03¢ to 28.31¢ a pound.

Corn fell ¾¢ to $3.56½ a bushel overnight.

Wheat for December delivery rose 2¼¢ to $5.24 a bushel overnight, while Kansas City futures rose 1½¢ to $5.26¾ a bushel.

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2. Speculative Investors Push Bearish Bets on Soybeans to Eight-Month High

Money managers pushed their bearish bets on soybeans to the highest level in eight months, according to the Commodity Futures Trading Commission.

Speculators raised their net-short positions, or bets on lower prices, to 82,217 soybean futures contracts in the seven days that ended on September 18, the CFTC said in a report. That’s up from 78,895 contracts a week earlier and the biggest such position since January 18.

Investors almost doubled their net-shorts in corn last week to 158,424 futures contracts. That’s up from 83,892 a week earlier and the most since July 24, government data show.

Large funds, hedgers, and other traders raised their bets on lower prices in soybeans and corn as the ongoing trade war with China shows no signs of abating and as U.S. growers begin harvesting what are expected to be record corn and soybean crops.

Still, demand for corn globally is expected to surge as the amount of the grain used for feed surges.

Speculators also were bearish on soft-red winter wheat for the first time since July 10. Investors were net short by 8,251 futures contracts.

Money managers were net-long hard-red winter wheat by 32,537 futures contracts last week, down from 40,185 contracts seven days earlier, the CFTC said.

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. Flooding Continues in Parts of Eastern Iowa, Western Illinois, More Rain on the Way

Flooding continues to be a problem in much of eastern Iowa and parts of western Illinois as excessive rainfall is causing rivers and streams to breach their banks, according to the National Weather Service.

As much as six times the normal amount of rain has fallen in the past week in the region. Thunderstorms are likely again Tuesday as a cold front moves through the area, the NWS said in a report early Monday morning.

Damaging wind and large hail are expected.

Parts of the Ohio River Valley, Kentucky, and Tennessee will see more severe thunderstorms today and tonight, and heavy rain is expected. As much as 5 inches of rain is possible through Wednesday afternoon, and flooding of small creeks and streams is expected.

“Additional waves of showers and a few thunderstorms are expected Tuesday and Wednesday,” the NWS said. “These showers and storms will be capable of producing heavy rainfall and gusty winds.”

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