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3 Big Things Today, September 25

Soybeans, Grains Lower Overnight; Money Managers Bullish Beans, Bearish Corn.

1. Soybeans, Grains Fall Overnight on Expectations For Lofty Carryout

Soybeans and corn were lower in overnight trading on expectations for increased surplus.

Harvest reports have varied widely with some coming in well above average and some well below. In southern Illinois some yields have been better than expected, while in Kansas dry weather during the growing season has pushed down yields.

Still, corn inventories at the end of the marketing year on August 31 totaled 2.35 billion bushels, up from the prior year’s 1.737 billion, according to the USDA. Soybean inventories at the end of last month totaled 345 million bushels, up from 197 million at the same time in 2016, the USDA said in a report earlier this month.

Corn carryout in the year that ends on August 31, 2018, are pegged at 2.335 billion bushels, down slightly but still fairly lofty, while soybean stocks are expected to rise to 475 million bushels.

“No matter where you believe the yield will finally end up, it is pretty clear that the U.S. is going to have excess supplies at harvesttime, and that fact is going to make it difficult for the corn market to sustain rallies into the end of the year,” said Tomm Pfitzenmaier, the president of Summit Commodity Brokerage in Des Moines, Iowa, in a note early Monday.

Soybeans for November delivery fell 5½¢ to $9.78¾ a bushel overnight on the Chicago Board of Trade. Soy meal futures lost $1.70 to $317.30 a short ton, and soy oil declined 0.34¢ to 33.88¢ a pound.

Corn for December delivery declined 1¾¢ to $3.51¾ a bushel overnight.

Wheat for December delivery fell 4½¢ to $4.45 a bushel in Chicago, while Kansas City futures lost 4½¢ to $4.45¾ a bushel.


2. Money Managers Turn Bullish on Soybeans Last Week, Increase Bets Against Corn

Speculative investors turned bullish on soybeans in the week that ended on September 19 while increasing their bets against higher corn prices.

Money managers were net long by 11,859 soybean contracts last week, according to the Commodity Futures Trading Commission. That compares with a net-short position of 7,246 contracts a week earlier.

Investors, however, increased their net-short position, or bets on lower prices, in corn to 130,902 contracts during the week, the CFTC said in a report. That’s up from a net-short position of 116,344 contracts a week earlier.

It’s possible that investors are betting the spread and buying soybeans while selling corn. The fundamentals in the Midwest haven’t changed with yield variable thus far, depending on how much rain each area received during the growing season.

Soft red winter wheat investors were net short by 73,941 contracts last week, down from 76,704 contracts seven days earlier.

Speculators lowered their net-long positions, or bets on higher prices, in hard red winter wheat to 12,030 contracts from 12,643 a week earlier, according to the CFTC.

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.


3. Heat Wave Likely to Continue This Week in Much of Eastern Midwest

The heat wave that hit much of the Midwest over the weekend will continue this week, as temperatures in many areas may hit records.

Highs in the upper 80s and lower 90s are expected in much of Illinois and Indiana this afternoon, according to the National Weather Service. Temperatures will stay hot in northern Illinois throughout the week but likely will drop with highs in the 70s in parts of Indiana starting late Wednesday.

On the East Coast, Hurricane Maria will approach land but likely won’t make landfall, the NWS said in a report early Monday.

“Hurricane Maria will approach the Mid-Atlantic coast early this week then finally shove eastward into the open Atlantic,” the NWS said. “Maria will likely not make landfall but will come close to portions of North Carolina midweek and could bring tropical storm force winds, locally heavy rain, storm surge, and very rough surf. Maria will create hazardous surf and rip currents for much of the East Coast this week.”



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