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3 Big Things Today, July 10

Wheat Futures Jump Overnight; Investors Bullish on Soft Red First Time in Two Years.

1. Wheat Futures Jump as Weekend Plains Rains Disappointing

Wheat prices rose in overnight trading after wet weather expected to offer some relief to parched spring crops in North Dakota was underwhelming.

Only small amounts of rain – about ¼ inch in only a few counties in the state – fell on Sunday. Some forecasts had been calling for more widespread rains over the weekend.

The entire Northern Plains where most spring wheat is grown in the U.S. has been extremely dry the past month, according to the National Weather Service. That’s left many investors, analysts, and farmers wondering if there’s going to be much of a spring wheat crop this year.  

Wheat for September delivery rose 13½¢ to $5.48½ a bushel overnight on the Chicago Board of Trade. Kansas City futures jumped 11¼¢ to $5.54¼ a bushel.

Soybeans also jumped overnight on concerns not only about the Northern Plains bean crop but also the canola and palm crops globally. Canola and palm are competing oilseeds for soybeans.

Soybeans for November delivery added 19½¢ to $10.35 a bushel overnight. Soy meal rose $7.90 to $345.90 a short ton, and soy oil futures gained 0.37¢ to 33.69¢ a pound.

Corn rose on the weather woes in the Northern Plains as December futures added 8¼¢ to $4.13 a bushel overnight.

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2. Speculative Investors Now Bullish Soft Red Winter, Increase Net Longs in Hard Red Wheat

Money managers were bullish soft red winter wheat for the first time since July 2015, and investors were net long on hard red winter futures by the most in at least six years as dry weather continues to plague the Northern Plains.

Net longs, or bets on higher prices, totaled 23,997 soft red futures contracts in the week that ended on July 3, according to the Commodity Futures Trading Commission, the first time investors were bullish on the grain in two years.

Speculative investors were net long by 54,574 hard red winter wheat contracts last week, the biggest such position since at least 2011, CFTC data show.

Investors have been getting more bullish on wheat as dry weather in the Northern Plains has likely led to spring crop losses. About two thirds of North Dakota is in some sort of drought, while the rest is abnormally dry, according to the U.S. Drought Monitor.

Money managers were also less bearish on corn and soybeans.

Net shorts, or bets on lower prices, in corn fell to 37,607 contracts, the lowest level in three weeks. In soybeans, net-short positions fell to 82,630 contracts, the lowest such position since the week ended on May 23, according to the CFTC.

The weekly Commitment of Traders Report from the Commodity Futures Trading Commission shows trader positions in futures markets.

The report provides positions held by commercial traders, or those using futures to hedge their physical assets; noncommercial traders, or money managers (also called large speculators); and nonreportables, or small speculators.

A net-long position indicates more traders are betting on higher prices, while a net-short position means more are betting futures will decline.

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3. Red-Flag, Thunderstorm Warnings Issued For Montana; Heat Indexes to Reach 107˚F. in Midwest

Much of Montana likely will see an odd mix of hot and dry weather and potentially severe thunderstorms this afternoon.

A red-flag warning indicating that it’s extremely dry and that wildfires are imminent has been issued for much of central Montana until 11 p.m. today due to a combination of low humidity, gusty winds, and lightning from “dry thunderstorms,” according to the National Weather Service.

Farther east, some scattered thunderstorms are likely that could bring rainfall, hail, and damaging winds, the NWS said in a morning report.

Temperatures this week in most of the Northern Plains will near 100˚F., the agency said.

In the Midwest, a heat advisory has been issued for an area encompassing much of southeastern Nebraska, southwestern Iowa, northeastern Kansas, and northwestern Missouri.

Temperatures this week will be in the mid-90s, with heat indexes as high as 107˚F. through Wednesday, according to the NWS.

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