3 Big Things Today, July 29, 2024

1. Soybean futures drop in overnight trading

Soybean futures plunged in overnight trading on predicted favorable weather in the Midwest. 

National Weather Service maps forecast rain during the next seven days for parts of the region, including much of Iowa and Illinois, the largest U.S. corn and bean producers. Additionally, much of the eastern Corn Belt is projected to see rainfall during the next week. 

Showers are expected to ease some dry areas in the western Midwest, and weather forecasts look wetter for parts of the eastern Midwest, Commodity Weather Group said in a note to clients.

Precipitation will boost soybeans and cotton in the Delta, the forecaster said. 

Sixty-eight percent of the U.S. soybean crop were in Good or Excellent condition last week, according to the USDA. Fifty-seven percent of the corn crop earned top ratings. 

The USDA is scheduled to release its weekly crop progress report this afternoon. 

The weather has been favorable in parts of the Midwest this growing season. Iowa is free of drought and abnormally dry conditions, according to the U.S. Drought Monitor. At the start of the year, 97% of Iowa were facing dry or drought conditions. 

Only 2.3% of Illinois are seeing abnormally dry conditions vs. 12% at the start of the calendar year, the monitor said. 

Soybean futures for November delivery fell 16½¢ to $10.32 a bushel overnight on the Chicago Board of Trade (CBOT). Soy meal lost $5 to $319.70 a short ton, and soy oil was down 0.31¢, to 41.52¢ a pound. 

Corn futures for December delivery dropped 1½¢ to $4.08½ a bushel.

Wheat futures for September delivery lost 3½¢ to $5.20 a bushel, while Kansas City futures gained 2¢ to $5.47½ a bushel. 

2. Speculators cut net-shorts in corn, beans

Investors reduced their net-short positions, or bets on lower prices, in corn and beans in the seven days that ended July 23, according to data from the Commodity Futures Trading Commission (CFTC).

Speculators held a short position of 333,885 futures contracts in corn, down from 352,772 contracts a week earlier, the government agency said. That’s the smallest bearish position since June 25. 

Money managers were net-short by 172,945 soybean futures contracts last week, down from 183,145 contracts seven days prior, the CFTC said. 

In wheat, hedge funds and other large investment firms held a net-short position of 73,159 in soft-red winter futures, up narrowly from 72,831 contracts. Speculators also held a net-41,016 hard-red winter contracts, down modestly from 44,624 contracts a week earlier, the agency said. 

The CFTC’s weekly Commitment of Traders 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 to decline.

3. Extreme heat expected in parts of the Midwest

Extremely hot weather is expected for a large chunk of the Corn Belt. Red flag and excessive heat warnings have been issued from the Texas panhandle east into southern Indiana, National Weather Service maps show. 

The eastern half of Kansas is under an excessive heat warning; indexes in some counties are forecast to reach 111°F, the agency said. Areas of eastern Missouri and western Illinois are predicted to see heat indexes of 114°F this afternoon. 

Heat-related illnesses increase significantly during extreme heat and high humidity, the agency cautioned. Those working outside are advised to use caution, take breaks in an air-conditioned environment, and limit activities to mornings or evenings, NWS said.