1. Soybeans and Grains Drop in Overnight Trading

Soybean and grain futures plunged in overnight trading as speculative investors likely sold their contracts after a recent run-up in prices.

Investors who were long the market, or had bet on higher prices, may be liquidating their contracts and booking profits, analysts said.

Fundamentals haven’t changed much in the past 24 hours as supplies are still relatively tight and demand remains strong.

Global soybean inventories are expected to drop to 86.6 million metric tons in the 2020-2021 marketing year, down from 96.5 million a year earlier, according to the U.S. Department of Agriculture.

World corn supplies are forecast to fall to 283.5 million metric tons this year from 304.5 million, the USDA said in a report last week.

Wheat inventories are pegged at 294.7 million metric tons, down from 299.4 million last year.

Demand is strong as total commitments to purchase U.S. soybeans since the start of the marketing year on Sept. 1 now stands at 61.4 million metric tons, up 53% from the same time frame last year.

Corn sales have jumped 76% year-over-year to 67.7 million metric tons, government data show.

Soybean futures for July delivery dropped 15¼¢ to $15.59 a bushel overnight on the Chicago Board of Trade. Soymeal lost 0.50¢ to $410.30 a short ton, while soy oil fell 0.92¢ to 67.75¢ a pound.

Corn futures for July delivery fell 4¼¢ to $6.54 a bushel.

Wheat futures for July delivery declined 13¢ to $6.85 a bushel overnight, while Kansas City futures lost 14¢ to $6.33¾ a bushel.

2. Winter Wheat Yield Projections Lofty in Northwestern Kansas

Winter wheat yields in northwestern Kansas are looking better than expected, though there’s evidence that the fungal disease stripe rust is prevalent in some fields, according to results for the first day of the Wheat Quality Council’s annual Kansas Wheat Tour.

After more than 170 stops, participants estimated yield at 59.2 bushels an acre, reportedly a multiyear high.

Those on the tour faced intermittent rainfall throughout the day, according to several reports.

Stripe rust is a disease that forms in wet conditions. Counties in western Kansas have received six times the normal amount of rain in the past two weeks, according to the National Weather Service.

About 58% of the Kansas wheat crop was heading at the start of the week, behind the normal 68% for this time of the year, the USDA said.

In Oklahoma, 91% was headed, just behind the normal 93%.

Nationally, 53% of the U.S. winter wheat crop was headed as of Sunday.

About 54% of the Kansas winter wheat crop was in good or excellent condition at the beginning of the week, while 59% of Oklahoma’s crop earned top ratings. Some 25% of the Texas crop was in good or excellent condition.

Gary Millershaski, a commissioner with the Kansas Wheat Commission and tour participant, told Reuters that his biggest concern is stripe rust.  

The tour continues throughout southwestern Kansas today. In parts of south-central Kansas, little or no rain has fallen in some counties in the past couple of weeks, weather maps show.

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3. More Precipitation Expected in Parts of Oklahoma, Texas, and Arkansas

More rain is expected in parts of Oklahoma, north Texas, and Arkansas today as flash-flood watches and flood warnings are in effect, according to the National Weather Service.

An additional 2 to 5 inches of rain may fall in some areas while isolated areas may see up to 8 inches of precipitation, the NWS said in a report early this morning.

“Rain showers with chances for thunderstorms will continue to be possible across eastern Oklahoma and northwest Arkansas today as a midlevel impulse lifts northward through the region,” the agency said. “This additional rainfall on top of recent rains could continue to increase flood and river flooding concerns. A flood watch remains in effect for much of southeast Oklahoma today.”

Storms in the area are expected to continue Thursday and Friday before finally lifting into the weekend. Only small amounts of rain are expected Saturday, and precipitation chances fall further Sunday and Monday, the NWS said.

In southwestern Kansas and the Oklahoma and Texas panhandles, some thunderstorms are possible this afternoon and evening.

Some storms along the Kansas-Oklahoma border may produce small hail and strong winds, the agency said.

In the northern Plains, meanwhile, some scattered thunderstorms are possible in part of central and northern South Dakota and parts of west-central Minnesota, the NWS said.