3 Big Things Today, November 17

 

 

Corn, Soybeans May Rise as Low Prices Likely to Attract Bargain Hunters

Corn and soybean futures may rise on speculation that low prices will attract bargain hunters.

Both overseas buyers and investors seeking a bargain purchase likely will, at the very least, consider U.S. corn and soybean supplies because prices are historically low.

Soybeans yesterday reached a fresh six-year intraday low while corn neared, but did not touch, contract lows set last week after the USDA upped its forecast for production and yield.

Corn futures for December delivery gained 1 ½ cents to $3.61 ½ a bushel overnight on the Chicago Board of Trade. 

Soybean futures for January delivery rose 1 ½ cents to $8.61 a bushel on the CBOT. December soymeal futures declined 30 cents to $288.50 a short ton. December soyoil rose 0.11 cent to 27.40 cents a pound.

Wheat futures may fall as favorable weather improves prospects for parts of the U.S. and other exporting countries, which could add to global supplies.

December wheat futures in Chicago fell 2 ½ cents to $4.91 ½ a bushel on the CBOT. Kansas City wheat for delivery the same month declined 1 ¼ cents to $4.66 ¼ a bushel.

**

Fund Managers Cut Ag Bets, Which May Be Good For Prices

Hedge fund managers in the week that ended November 10 turned sour on agricultural commodities after the U.S. Department of Agriculture raised its outlook for corn and soybean production last week, according to data from the Commodity Futures Trading Commission. (http://www.cftc.gov/MarketReports/CommitmentsofTraders/index.htm)

Positions on corn went from a plus-19,860 futures contracts to a net-short of 53,164 contracts, meaning the number of money managers who are betting on a price decline increased considerably from the prior week. Soybean investors on November 10 were net-short 48,930 contracts and wheat traders were net-short by 22,914 contracts.

Needless to say, large investors don’t seem to have much faith in the ags.

But that actually may be a good thing. When positions are extremely short, like they are now, investors begin to see two things: a bargain and oversold conditions.

The low prices we’ve seen recently could draw overseas buyers who need to fill immediate needs. It also may give sellers pause to think prices are oversold, and that now may be a good time to buy. As we’ve seen in the past, fund managers get spooked easily and given any bullish news whatsoever, the shorts could potentially begin buying back contracts and bumping prices.

Now, we just need some bullish news.

**

Crazy Day of Weather With Floods, Blizzards

It’s going to be a bit of a crazy day of weather across the U.S.

A wide swath of land from east Texas to central Illinois is still at risk of flooding, while a blizzard is hitting part of the High Plains, according to the National Weather Service (weather.gov).

Flash flood advisories are in effect for several states including parts of Illinois, Missouri, all of Arkansas, Louisiana, and Mississippi. A strong storm could dump several inches of rain in a short time, causing flooding. That, of course, is bad for farmers in those states who have any crops left to harvest.

A blizzard warning has made its way into western Nebraska and Kansas, which could benefit winter wheat that’s recently emerged. Ahead of that is a winter weather advisory creeping east into central counties in both states.

Get involved in the discussion in Marketing Talk at http://community.agriculture.com/t5/Marketing/bd-p/marketing.