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3 Big Things Today, March 6

Wheat Futures Rise Overnight; Speculators Boost HRW Bets Near Three-Year High.

1. Wheat Rises on Boost From Speculators, Dry Southern Plains Weather

Wheat futures rose in overnight trading, snapping back from losses on Friday, after traders received a boost of confidence from speculative investors who pushed their net-long positions in hard red winter contracts to the highest level in almost three years.

Speculators likely increased their bets on higher hard red winter prices amid extremely low seeding last fall. Farmers planted 32.4 million acres with winter wheat in the U.S. last fall, down 10% from the prior year and the smallest amount since 1909, according to the Department of Agriculture.

Hard red winter seeding declined 12% year over year, the USDA said in a January report.

Extremely dry weather in much of U.S. winter wheat country also is giving prices a boost this morning, according to analysts. Little rain has fallen in much of the Southern Plains in the past month, leaving hard red winter wheat plants without water, NWS data show.

Wheat futures for May delivery rose 5¾¢ to $4.59¼ a bushel overnight on the Chicago Board of Trade. Kansas City futures added 4¾¢ to $4.76½ a bushel.

Corn futures for May delivery gained ½¢ to $3.81¼ a bushel in Chicago.

Soybean futures rose 4½¢ to $10.42 a bushel overnight. Soy meal gained 70¢ to $333.70 a short ton, and soy oil added 0.05¢ to 34.43¢ a pound.  

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2. Money Managers Increase Bullish Bets on HRW to Highest in Almost Three Years

Money managers pushed bets on better hard red winter wheat prices to the highest level in almost three years while reducing bullish positions in corn and soybeans last week, according to the Commodity Futures Trading Commission.

Speculators were net-long by 37,667 hard red winter wheat contracts in the week that ended on February 29, up from 34.573 the prior week, according to the CFTC. That’s the longest such position since April 8, 2014, government data show.

U.S. growers last fall planted the least winter wheat since 1909, according to the Department of Agriculture. A combination of low prices and large global inventories left fields normally seeded with the grain empty, which has helped underpin prices somewhat.

Speculative investors reduced their bullish bets on corn and soybeans last week. Net-longs in corn declined to 87,657 from 106,758 the prior week, according to the CFTC. Net-long positions in soybeans declined to 129,690 contracts from 161,595.

Money managers increased their net-shorts, or bets on lower prices, in soft red winter wheat to 59,233 contracts from 37,551 the prior week, the government said.

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. Dry Weather, Wind Dominate U.S. Weather Maps on Monday

The U.S. weather map is teeming with activity this morning as dry weather in a strip of the central U.S. indicates fire risks while high-wind warnings dominate the Southern Plains.

Low humidity combined with windy and warm weather has left a stretch of land from eastern New Mexico northeast into the Texas and Oklahoma panhandles and north all the way to northwestern Iowa under a red-flag warning.

In hard red winter wheat country, relative humidity is expected to be as low as 7%, the National Weather Service said in a report early Monday. Temperatures are forecast in the 70s today, and winds may gust up to 55 mph, according to the NWS.

In other parts of the Southern Plains, the winds may gust up to 70 mph, creating dangerous conditions, the agency said. The wind warning is in effect until 6 p.m. tonight.

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