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3 Big Things Today, February 27

Wheat Futures Decline in Overnight Trading; Money Managers Push HRW Bets to Highest Since 2014.

1. Wheat Futures Decline as Global Inventories Seen Higher

Wheat futures were lower in overnight trading after the International Grains Council last week raised its global carryout estimate.

The council in a report on Thursday pegged world inventories of wheat at 236 million metric tons, up by a million tons, amid increased exports. Production is forecast at 752 million metric tons, unchanged from the prior year, according to the IGC.

Global corn producers will increase output by 4 million tons to 1.049 billion tons, but the agency said consumption would jump by 7 million tons, pushing the IGC’s carryout estimate down to 224 million tons from 225 million in a prior report.

Wheat futures for May delivery fell 2¾¢ to $4.45¼ a bushel overnight on the Chicago Board of Trade. Kansas City futures lost 3¢ to $4.64 a bushel.

Corn futures for March delivery added ¼¢ to $3.71 a bushel.

Soybean futures for May delivery gained 2¼¢ to $10.26½ a bushel overnight in Chicago. Soy meal futures rose $1.60 to $337.30 a short ton, and soy oil fell 0.02¢ to 32.65¢ a pound.

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2. Money Managers Push Bets on Higher Hard Red Winter to Highest in Almost Three Years

Money managers pushed bets on higher prices in hard red winter wheat to the highest level in almost three years, as production of the grain is expected to plunge amid the lowest planted acreage in more than a century.

Speculative investors were net long by 34,573 hard red wheat futures contracts in the week that ended on February 21. That’s up 27,579 contracts a week earlier and the biggest level since May 2014, according to data from the Commodity Futures Trading Commission.

U.S. growers are expected to produce 1.84 billion bushels of wheat in the 2017-2018 marketing year that starts on June 1, the Department of Agriculture said in a report last week. That’s down 20% from the prior year and the lowest in 11 years.

The USDA said earlier this year that acreage dedicated to wheat would fall to the lowest since 1909.

Speculators also were more bullish on corn, pushing net-long positions, or bets on higher prices, in the grain to 106,758 contracts, up from 97,199 the prior week and the largest level since the end of June.

Net-long positions in soybeans declined to 161,595 futures contracts from 174,704 the prior week, and soft red winter wheat net shorts, or bets on lower prices, fell to 37,551 contracts from 48,122 contracts, according to the CFTC.

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3. Extremely Dry Conditions in the Southern Plains Brings Red-Flag Warning

It’s warm and dry in the Southern Plains, leading to another so-called red-flag warning in the region.

Extremely low humidity, warm weather, and strong winds have increased the risk of wildfires in the area, according to the National Weather Service. Wind gusts of up to 35 mph are expected, which could spread fire rapidly.

“Breezy to windy conditions combined with a dry air mass will lead to critical fire weather conditions across the western Texas and Oklahoma panhandles this afternoon,” the NWS said in a report early on Monday. “Elevated fire weather is possible further east where wind speeds will be slightly reduced. Please do not take part in activities which may lead to sparks.”

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