Wet, Cold Weather Affects Much of Plains and Midwest
The National Weather Service has issued freeze warnings from N Illinois all the way down to the panhandle of Texas early this morning. Over the weekend, parts of E Nebraska saw a few inches of snow and have reported power outages as overnight temps have dipped as low as the mid 20s. In SW Kansas, there have been reports of a hard freeze, possibly halting plant maturity. As of last week’s USDA Crop Progress report, Kansas was 58% planted with winter wheat.
Speculators Cut Down Short Positions In Corn and Soybeans
The Commitment of Traders report showed that as of Oct 9, managed money reduced their net shorts for corn by 27,988 to 39,399 contracts. This represents the smallest short position held by speculators since June. For soybeans, money managers to their net short position down by 3,187 to 39,691 contracts, also the smallest net short position since June of this year. For Chicago SRW, managed money remains bearish, increasing their net short position by 6,390 to 18,098 contracts, the most bearish position since May 1. Speculators also cut down their net long position on KC HRW, dropping 2,579 to 20,272 contracts.
First Brazilian Crop Estimate Expects Less Soy Production But More Corn than 2017/18
Conab, a Brazilian statistical firm, estimates that the planted area for soybeans in Brazil will increase by about 2% from last year to a total of 88.45 million acres. However, Conab projects that yields will fall to 48.8 bpa, a drop of 2.7% from the previous year’s 50.2 bpa. For first crop corn, Conab estimates that acreage will increase by 2.1% to 12.74 million acres but yields would fall 2%. For second crop corn, or safrinha, they estimate no change in acreage of 28.5 million acres but yields to improve by 17% to 84.9 bpa, thanks in part to an above average planting pace for soybeans. Conab predicts that soybean acres will increase to meet the demand coming China as they seek alternatives to US origin soybeans. Also, domestic corn prices are up around 40% from the previous year, likely leading to more first crop corn acres.
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