3 Big Things Today, September 23

1. Soybeans Jump Overnight as China Trade Tensions Ease

Soybeans jumped in overnight trading on renewed optimism about a trade deal between the U.S. and China despite last week’s cancellation by a Chinese delegation to visit farms in Montana and Nebraska.

Officials from the Asian nation had scheduled trips to the two farm states, but abruptly canceled them on Friday, leading many to speculate that talks had once again broken down.

Still, China’s Commerce Ministry said that the sides will “maintain communication” on trade talks, and both sides have said last week’s low-level talks were constructive and productive.

That opens the door for high-level negotiations in October, which already had been scheduled before last week’s meetings.

Soybean futures for November delivery rose 10¼¢ to $8.93 a bushel overnight on the Chicago Board of Trade. Soy meal added $2.50 to $297.50 a short ton, while soybean oil gained 0.07¢ to 29.47¢ a pound.

Corn futures for December delivery rose 2¢ to $3.72¾ a bushel overnight.

Wheat for September delivery fell ¼¢ to $4.84 a bushel, while Kansas City futures gained 3¾¢ to $4.11¼ a bushel.

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2. Speculative Investors Most Bearish on Corn Futures in Four Months, Cut Net Shorts in Soybeans

Money managers pushed net-short position, or bets on lower prices, in corn to a fresh four-month high while reducing their bearish bets on soybeans.

Net shorts in corn in the seven days that ended on September 17 totaled 176,653 futures contracts last week, which was up from 143,467 contracts a week earlier, according to the Commodity Futures Trading Commission.

That’s the highest level since the week that ended on May 14, the CFTC said in a report.

Investors, however, lowered their bearish bets in soybeans to 45,612 futures contracts through September 17, about half the previous week’s total of 90,013 contracts.

That’s the smallest net-short position in soybeans since the seven days that ended on July 23, government data show.

Optimism about a trade deal with China, which has faded since last week, likely led to a reduction in bearish soybean bets.

Speculators were net short by 37,605 hard red winter wheat futures contracts as of last week, down from 41,709 contracts the previous week and the smallest level since August 27, the CFTC said.

Investors also lowered their net-short positions in soft red winter wheat futures to 7,093 contracts last week. That’s down from a bearish position of 8,905 contracts a week earlier.

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. Missouri River Will Continue to Flood Along Nebraska-Iowa Border, More Storms Possible

Flooding of the Missouri River along the Nebraska-Iowa border will continue today with the waterway rising through early Tuesday and then slowly falling, according to the National Weather Service.

Moderate to minor flooding will continue into next week, as it has for much of this year, even after the water levels decline, the NWS said in a report early this morning.  

More storms are in the forecast, as there’s a chance for severe thunderstorms on Tuesday evening in parts of eastern Nebraska and western Iowa, the agency said. Large hail, damaging winds, and an isolated tornado are all possible.

Farther east, storms also are possible in parts of eastern Iowa and northern Illinois. The highest chances for severe weather in the region are late Tuesday into Wednesday.

“A few stronger storms are possible during this time, mainly along and west of I-39 in north-central Illinois,” the NWS said. “Active weather returns late in the work week into the weekend, with periodic chances for thunderstorms expected.”