Speculators Add Bullish Position for Corn and Bearish Position for Soybeans
Managed money, a proxy for speculators, increased their net long position for corn by 6,645 to 27,903 contracts. This is the largest net long position held by speculators since June 5. Money managers were selling soybeans in the week ending on Oct 23, increasing their net short position by 8,167 to 39,279 contracts. Much of the rain over the Midwest has let up, allowing farmers to get back into the field and resume harvest. Managed money also increased their net short position in Chicago SRW by almost double, adding 13,771 shorts to total 30,023 contracts. This marks the largest bearish position since April 24. Speculators also decreased their net long position in KC HRW by 6,386 to 17,106 contracts.
China Announces New Government Guidelines for Animal Rations to Dampen Demand for Soy
Last Friday, China’s Feed Industry Association approved new standards for livestock feed. The guidelines call for 1.5% less protein in hog feed and 1% less for chickens in an effort to reduce demand for soymeal. The new standards aim to reduce Chinese soybean demand by 14 MMT or nearly 13%. Prices of soybeans and meal in China have skyrocketed following the Trade War with the US. China’s Dalian Commodity Exchange has seen the most actively traded soymeal contract rise to all-time highs of $474.37 per tonne. Traders’ sentiment has been that these new standards are enforceable as they are just guidelines for now and that the price of soymeal and its substitutes will be the primary drivers for any change in rations.
Export Sales Notice
Private exporters reported to the U.S. Department of Agriculture export sales of 120,000 metric tons of soybeans for delivery to unknown destinations during the 2018/2019 marketing year.
Weather Forecast Calls for Isolated T-Storms Over E Iowa, W Illinois
The National Weather Service is calling for thunderstorms to begin later this night and bring rain until Tuesday afternoon. Some areas could see as much as an inch of rain. The Mississippi River remains flooded in certain areas along the coast of Iowa and Illinois but has been receding. The NWS reports that the water level at Muscatine, IA was 16.2 feet, just above the flood level of 16 feet. W Iowa and E Nebraska have also been dealing with too much moisture and the Missouri River there is flooded as well. However, very little rain is in the 10 day forecast for the area.
The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)
