3 Big Things Today, October 28, 2019
1. Soybeans Higher Overnight on U.S.-China Trade Optimism
Soybeans were higher in overnight trading Monday amid optimism that the U.S. will finally sign a trade agreement with China.
The sides are “close to finalizing some sections” of a trade deal, according to the U.S. Trade Representative. China’s Commerce Ministry reportedly said at least part of an agreement is almost ready.
Presidents Donald Trump and Xi Jinping are scheduled to meet in Chile next month and are widely expected to sign at least a partial trade deal.
China has agreed to buy more agricultural products in the meantime while the U.S. held off on raising tariffs on some Chinese goods earlier this month.
Discussions are ongoing, the USTR’s office said in its statement.
Soybean futures for November delivery rose 3¼¢ to $9.23½ a bushel overnight on the Chicago Board of Trade. Soy meal was up 30¢ to $303.60 a short ton, while soybean oil added 0.16¢ to 31.12¢ a pound.
Corn futures for December delivery fell 1¾¢ to $3.85 a bushel overnight.
Wheat for September delivery dropped 5¼¢ to $5.12½ a bushel, while Kansas City futures declined 2½¢ to $4.20¼ a bushel.
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2. Money Managers Push Net-Long Positions in Beans to Highest Level in 17 Months
Money managers increased their net-long positions, or bets on higher prices, in soybeans to the highest level in about 17 months, according to the Commodity Futures Trading Commission.
Investors held a net 67,172 long positions in soybean futures contracts as of October 22, up from 47,953 contracts a week earlier and the most since the seven days that ended on May 29, 2018, CFTC data show.
Adverse weather that’s curbing production in the U.S. and optimism about a trade deal with China are giving investors hope that prices will rise.
Speculators weren’t so kind in corn, increasing their net-short position, or bets on lower prices, to 75,186 futures contracts last week.
That’s up from 64,749 contracts seven days earlier, the agency said in a report.
Money managers also increased their bearish bets in hard red winter wheat to a net-short position of 27,077 futures contracts. That’s up from 24,742 contracts a week earlier.
In soft red winter wheat, speculative investors turned positive, moving their position to a net-long of 21,629 futures contracts from the previous net-short position of 3,662 futures contracts, according o the CFTC.
That’s the biggest bullish position investors have had in soft red winter wheat since the seven days that ended on July 9.
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. Snow Expected in Hard Red Winter Wheat Country, in Parts of Illinois, Missouri, Iowa
Snow is expected in parts of the Oklahoma and Texas Panhandles where hard red winter wheat is emerging from the ground, though less than an inch of accumulation is expected, according to the National Weather Service.
The snowfall is expected today, but later this week the wintry weather will include not only snow but also freezing rain and ice pellets, the NWS said in a report early this morning.
Wind chill values also are expected to drop into the single digits Tuesday night into Wednesday morning then again overnight into Thursday.
Farther north and east in parts of central Illinois, eastern Iowa, and northeastern Missouri, a fast-moving storm is expected to drop as much as 2 inches of snow Monday night. The snow will accumulate only on grassy areas, the NWS said.
Snow and rainfall are expected for much of this week in the region, the agency said.