1. Soybeans, Grains Plunge Overnight on Trade Tensions
Soybeans and grains were sharply lower in overnight trading Monday after President Donald Trump said in a tweet that he will raise the tariff rate on more than $200 billion worth of Chinese goods to 25% from its current level of 10% starting Friday.
That raised worries that China will increase its levies on U.S. goods including agricultural imports, effectively cutting off purchases of soybeans.
Prior to the trade dispute between the world’s two largest economies, China was the biggest buyer of U.S. soybeans.
Trump complained in his tweet that trade talks with China were moving “too slowly.”
U.S. Trade Representative Robert Lighthizer and Commerce Secretary Steven Mnuchin were in Beijing last week, and Chinese Vice Premier Liu He is scheduled to be in Washington later this week for more negotiations.
Both sides have said the talks, which have dragged on longer than expected, were going well and were seemingly optimistic about the outcome.
Soybeans for May delivery plunged 18¢ to $8.24¼ a bushel overnight on the Chicago Board of Trade. Soy meal lost $3.80 to $294.40 a short ton, and soy oil declined 0.54¢ to 26.81¢ a pound.
Corn futures for May delivery fell 9¢ to $3.61¾ a bushel overnight.
Chicago wheat for May delivery lost 7¢ to $4.31 a bushel, while Kansas City wheat dropped 9¢ to $3.92½ a bushel.
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2. Money Managers Cut Bearish Bets in Corn Futures, Raise Net Shorts in Soybeans
Money managers lowered their net-short positions, or bets on lower prices, but increased their bearish positions in soybeans last week, according to the Commodity Futures Trading Commission.
Investors were net short by 318,964 corn futures contracts as of April 30, the CFTC said in a report. That’s down from 344,185 futures contracts seven days earlier and the smallest such position since April 9.
Speculators, however, raised their bearish bets on soybeans, holding a net position of 148,036 futures contracts, up from 133,944 contracts the previous week, according to the government.
Money managers have been bearish on corn and soybeans for some time amid ample global supplies and concerns about the ongoing trade talks with China. President Trump’s tweet about raising tariffs on Chinese goods likely won’t help sentiment.
In wheat, investors raised their bearish bets for both hard red and soft red winter contracts.
Speculators were net short by 59,640 hard red winter futures contracts, up from 55,194 contracts the previous week.
They held 89,103 net-short positions in soft red winter wheat, up from 76,715 futures contracts seven days earlier, according to the CFTC.
Investors have been bearish on wheat for months amid rising global supplies and favorable crop conditions in the U.S.
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3. Eastern Kansas, Western Missouri Under Flash Flood Warnings as More Rain Expected
The eastern half of Kansas and much of west-central Missouri are under flash flood watches and warnings this morning, according to the National Weather Service.
The ground in the area already is saturated from recent rainfall, and another 2 to 4 inches of precipitation are expected in the next 72 hours, the NWS said in a report early this morning.
Some areas could get another 5 inches of rain by Wednesday night.
In parts of Kansas, another 2 inches of rain fell overnight, which will exacerbate flooding in the area. Another inch is likely to fall today.
In northern Oklahoma, meanwhile, a severe thunderstorm warning is in effect near Muskogee, as a weather system moves east into western Arkansas this morning. There will be a lull in activity this morning before storms flare up again in northeastern Oklahoma and northwestern Arkannsas this evening.
“Some of these storms will be strong to severe with large hail and strong gusty winds the main concern,” the NWS said.
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