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3 Big Things Today, August 22

Wheat Futures Down on Rising Output; Money Managers Less Bullish on Record Production.

1. Wheat Falls Amid Rising Output as HRW Production Rises 27%

Wheat futures declined overnight amid increasing domestic and global production of the grain. Corn and soybeans were little changed.

Hard red winter wheat production in the U.S. this year is expected to rise 27% to 1.05 billion bushels, according to the Department of Agriculture. That’s expected to push supplies of the variety up 30% to 578 million bushels, the USDA said.

Global production is also rising, as Russia is expected to have a record crop, which could curb demand for supplies from the U.S.

Chicago wheat futures for December delivery fell 4¢ to $4.40¾ a bushel overnight on the Chicago Board of Trade. Kansas City futures were down 2¢ to $4.42¾ a bushel.

Corn futures for December delivery lost 1¾¢ to $3.42 a bushel.

Soybeans November delivery added 2¢ to $10.06½ a bushel, soy meal futures for December delivery $2.90 to $328.40 a short ton, and soy oil lost 0.49¢ to 34.07¢ a pound.


2. Money Managers Continue to Get More Bearish Corn, Beans

Money managers reduced bets for higher corn prices and were more bearish on soybeans last week as rainfall is forecast to boost production of both crops to records.

Speculative investors were net-long 141,495 corn futures contracts in the week that ended on August 16, the Commodity Futures Trading Commission said in a report on Friday. That’s down 14% from the prior week.

Soybean investors held 99,425 net-short positions, or bets on lower prices, 12% more than they had the prior week, according to the CFTC.

U.S. producers will harvest 15.2 billion bushels of corn this year and 4.06 billion bushels of soybeans, both records, as favorable weather for much of the growing season boosts yields. The dry weather associated with a La Niña weather pattern never formed. The extreme heat that did make its way to the Midwest was mostly offset by ample rain.

Still, some areas of concern still exist, mostly in the eastern Corn Belt. Ohio is still dry, as is Michigan. For the most part, however, precipitation isn’t a concern, and in some areas, growers are hoping the rain stops.  

Investors also raised their net-short positions to 120,312 contracts in soft red winter wheat and to 26,461 contracts in hard red winter wheat, according to the CFTC.

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3. Drier Weather Today For Much of Midwest

Drier weather is on the way for the Midwest today, as farmers were hoping for a break from the constant rain that’s caused flooding from the Gulf Coast to the Upper Midwest.

Parts of Louisiana are still under water today after heavy rainfall the past week caused extreme flooding, killing almost a dozen and leaving tens of thousands homeless. Flooding also was a problem last week in parts of Illinois and Missouri, according to the National Weather Service.

A drier pattern means little or no rain in much of the northern Midwest. The precipitation hasn’t stopped in central and southern Texas, however, as flooding is expected to be an issue today, the NWS said in a report on Monday morning.

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