1. Soybeans Fall Overnight as Large Net-Long Positions May Spook Investors

Soybean futures fell overnight on concerns that investors holding extremely large net-long positions will eventually sell off contracts and liquidate positions.

Money managers last week held the biggest net-long position in 23 months, according to the Commodity Futures Trading Commission. Speculative investors have increased bets on higher soybean prices for seven straight weeks, a trend that some feel will end soon given large global production and inventories, both of which are expected to be a record.

Fundamentally, not much changed over the weekend. More rain is expected in parts of Argentina, which will further delay the harvest in northern growing regions, according to MDA Information Services. Growers in the South American country have been unable to collect their crops as excessive rainfall affects millions of acres of land.

Prices were extremely volatile last week, rising more than 60¢ in three days before selling off sharply on Friday.

Soybean futures for July delivery fell 7½¢ to $9.88¾ a bushel overnight on the Chicago Board of Trade. Soy meal futures declined $5.50 to $309.10 per short ton, while soy oil lost 0.17¢ to 34.13¢ a pound.

Corn futures for May delivery fell 1½¢ to $3.74 a bushel.

Wheat futures for May delivery lost 2¼¢ to $4.71¾ a bushel overnight in Chicago. Kansas City wheat dropped 5½¢ to $4.68 a bushel.

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2. Speculators Push Soybean Net-Longs to Highest Since May 2014

Speculative investors’ love affair with soybeans continued last week as they are not net-long by the largest amount in almost two years, according to the CFTC.

Investors have 129,884 net-long positions as of April 19, the biggest such position since May 2014, the agency said in a report on Friday. Excessive rain in Argentina has continued to keep farmers out of fields, delaying the harvest and diminishing crop prospects.

Along with fewer beans from Argentina, extremely dry weather in parts of Brazil is plaguing crop production. Exports from Brazil also are of concern due to the country’s volatile political landscape after some lawmakers initiated impeachment proceedings against President Dilma Rousseff, who is caught up in a scandal involving partially state-owned oil giant Petrobas.

It’s not just soybeans that are being affected by the dry weather and political worries in Brazil. Bets on lower corn prices dropped for the fifth time in six weeks. Money managers held 29,272 net-short positions, or bets on lower prices, in corn last week.

Wheat net-shorts also declined last week with speculators holding 89,658 bets against soft red winter wheat and 13,755 net-shorts in hard red winter wheat, according to the CFTC.

The sell-off in beans continued overnight in Chicago after prices run up more than 60¢ in the three middle days last week before dropping on Friday. Fund manager are notoriously nervous folks, so it probably wouldn’t be a surprise for that net-long position (up for seven straight weeks) to take a break sometime soon.

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3. Thunderstorms Expected This Week in Central, Southern Plains

Widespread thunderstorms are expected in much of the western U.S. today and tomorrow and into the Southern and Central Plains on Tuesday, according to the National Weather Service.

“A cold front will bring wet and unsettled weather to much of the western U.S.,” the agency said in a report on Monday morning. “A few severe thunderstorms will be possible near the Great Lakes and over portions of the Plains Monday. A more extensive severe weather outbreak is expected Tuesday across portions of the Southern and Central Plains.”

Rainfall is expected for much of western and central Kansas this week, though storms are expected to be strong at times, according to the NWS. Lighting is a risk for the region the entire week.

Winds will be strong through much of New Mexico today, which could spark wildfires in some areas where rain is absent. The Midwest looks mostly dry, though there is a slight risk of a thunderstorm in parts of eastern Iowa through central Illinois, the NWS said.

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