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3 Big Things Today, April 4, 2022

Grains, Beans Higher Overnight; Investors Cut Net-Longs Across the Board.

1. Grain, Soybean Futures Rise in Overnight Trading

Grains and soybeans were higher in overnight trading amid declining exports from Ukraine and calls for dry weather in the Southern Plains.

Ukraine corn exports in March dropped to 1.1 million metric tons and wheat shipments fell to 309,000 tons, Reuters reported, citing the country’s Economy Ministry.

On a positive note, Ukraine’s agriculture ministry said it now expects growers to plant crops from corn to sugar beets on 13.4 million hectares (32.4 million acres) this year, much higher than a previous outlook.

Ukraine has accused Russia of war crimes after a mass grave was reportedly found near the capital city of Kyiv, and videos showed bodies in the streets in the town of Bucha.

Also boosting wheat prices is the five-day outlook that shows little to no rain in the Southern Plains.

About 66% of Kansas, the biggest wheat-producer in the U.S., is facing drought conditions, according to the U.S. Drought Monitor. Around 1.9% of the state is seeing exceptional drought, the worst-possible rating.

The exceptional drought is focused on the extreme southwestern corner of the state, where hard-red winter varieties are attempting to grow.

Little to no rain has fallen in parts of the Southern Plains, including the Oklahoma panhandle, in the past 30 days, according to the National Weather Service’s precipitation page. 

Wheat for May delivery rose 12¼¢ to $9.96¾ a bushel overnight on the Chicago Board of Trade while Kansas City futures gained 15¾¢ to $10.28¾ a bushel.

Corn futures added 10¼¢ to $7.45½ a bushel. 

Soybean futures for May delivery gained 10½¢ to $15.93¼ a bushel. Soymeal jumped $6.10 to $456.10 a short ton, and soybean oil futures fell 0.05¢ to 71.15¢ a pound.

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2. Investors Cut Net-Long Positions in Corn, Beans

Money managers cut their net-long positions, or bets on higher prices, in corn and beans in the seven days that ended on March 29, according to data from the Commodity Futures Trading Commission.

Investors held a net-341,639 corn-futures contracts last week, the CFTC said in a report.

That’s down from 371,914 contracts a week earlier and marks the smallest bullish position since March 1.

Speculators last week held 151,028 soybean-futures contracts, down from 164,248 contracts the previous week and the smallest such position since February 1, the agency said.

In wheat, hedge funds and other large investors held a net-long position of 44,963 hard-red winter futures as of March 29, down from 45,328 contracts the previous week.

Investors also held a net-19,645 soft-red winter wheat contracts, down from 22,692 contracts a week earlier and the smallest such position since the seven days that ended on March 1, the CFTC said in its report.

The weekly Commitments 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 Forecast For Parts of South Dakota

Extremely dry weather continues to plague much of the western U.S., according to the National Weather Service.

Red-flag warnings have been issued in much of western South Dakota and counties in northeastern Wyoming, NWS maps show.

Winds in the area are forecast from 15 to 25 mph with gusts of up to 45 mph, the agency said. Relative humidity is now expected to drop as low as 10%.

Farther south in the Southern Plains where hard-red winter wheat is growing, high-wind and fire-weather watches have been issued.

Wind speeds are expected to be sustained from 35 to 45 mph with gusts of up to 65 mph possible, the NWS said.

“Damaging winds could blow down trees and power lines,” the agency said. “Travel could be difficult, especially for high-profile vehicles.”

Fire-weather watches also have been issued from noon to 9 p.m. in parts of the Texas panhandle.

Winds will gust up to 45 mph while humidity will drop as low as 10% this afternoon and evening, the NWS said.  

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