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3 Big Things Today, May 22

Wheat Rises as Viral Disease Spreads; Money Manager Leave Positions Little Changed.

1. Wheat Rises as Viral Disease Threatens Hard Red Winter Crop

Wheat futures rose on reports that wheat streak mosaic, a deadly virus that can curb yields and production, is becoming a major issue with the Kansas crop.

The disease, which causes wheat stands to be yellow and sparse and is spread by the wheat curl mite sometimes from volunteer plants that weren’t eliminated, has been found in six west-central Kansas counties, according to the Kansas State Research and Extension Agronomy department.

“Many fields in this area are severely diseased and could experience more than 70% loss – if not complete loss,” industry group Kansas Wheat said in a report last week. “The rest of western Kansas is dealing with high distributions of this disease, while the central region is also seeing high and moderate infection levels.”

The hard red winter wheat crop was hit by a winter storm the last weekend of April, which likely caused some yield loss as plants were snapped by extremely heavy and deep snow.

Wheat for July delivery rose 3¢ overnight on the Chicago Board of Trade, and Kansas City futures added 4¢ to $4.42 a bushel.

Soybean futures for July delivery rose 2¾¢ to $9.55¾ a bushel overnight. Soy meal added $1.10 to $308.10 a short ton, and soy oil futures gained 0.07¢ to 33.11¢ a pound.

Corn futures gained 1½¢ to $3.74 a bushel in overnight trading.

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2. Money Managers Change Bets on Corn, Beans Slightly, Reduce Net-Longs in HRW Wheat

Speculative investors didn’t make many changes in their weekly holdings of corn and beans but reduced their bets on higher hard red winter wheat prices.

Money managers reduced their net-short positions, or bets on lower prices, in corn futures to 200,695 contracts, down from 203,976 the prior week, according to the Commodity Futures Trading Commission.

Investors increased their net-short positions in soybeans by less than 1,000 contracts to 39,312 contracts, the CFTC said in a report.

Net shorts in soft red winter wheat rose to 130,695 contracts, up from 113,819 seven days earlier, according to the government.

While that was the biggest change week over week, the most notable difference was in hard red winter wheat where money managers curbed their net-long positions, or bets on higher prices amid a lack of reporting on damage done by a late-April snowstorm in Kansas.

Investors were net-long by 2,011 contracts last week, down from 13,082 the prior week, according to the CFTC. Renewed worries about a viral disease in Kansas, however, may make money managers again bullish on the grain.

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. Thunderstorms Forecast This Week in Parts of Southern Plains, Midwest

Rain is falling in the Southern Plains and the Midwest in areas that don’t need it.

Numerous thunderstorms were reported in the Texas and Oklahoma panhandles this morning though most of the rainfall will stay north of Interstate 40. The storms will bring wind gusts of up to 45 mph and locally heavy rain, according to the National Weather Service.

Rain is expected throughout the day and evening, the NWS said in an early report on Monday.

In the Midwest, more precipitation is forecast for parts of Illinois, southern Wisconsin, and southern Michigan today and tomorrow.

Rain is likely this evening in parts of northern Illinois and tomorrow for the rest of the region. Thunderstorms are also possible later this week with a front moving through Friday and Saturday, according to the NWS.

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