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3 Big Things Today, April 11, 2022

Wheat Futures Jump Overnight; Investors Raise Bullish Bets on Beans, Corn.

1. Wheat Futures Surge in Overnight Trading

Wheat futures jumped in overnight trading after the U.S. Department of Agriculture cut its forecast for grain shipments from Ukraine amid ongoing attacks by Russia forces.

Ukraine is expected to export 19 million metric tons of wheat in the 2021-2022 marketing year, the USDA said in its monthly World Agricultural Supply and Demand Estimates (WASDE) report.

That’s down from the March outlook for 20 million metric tons.

Corn exports from Ukraine are now pegged at 23 million metric tons, well below the previous outlook for 27.5 million tons, the USDA said.

“Russia’s recent military action in Ukraine significantly increased the uncertainty of agricultural supply and demand conditions in the region and globally,” the agency said. The report “represents an ongoing assessment of the short-term impacts as a result of this action.”

In Ukraine, the death toll from a Russian attack on a train station has climbed to 57, according to media reports. German leaders are claiming indications of war crimes have been found, and Austrian Chancellor will meet with Russian President Vladimir Putin this week.

Russian troops are reportedly readying themselves for an offensive in southern Ukraine.

Soybeans, meanwhile, were lower in overnight trading after the WASDE report.

Brazil soybean output is now seen at 125 million metric tons, down from the previous month’s projection for 127 million tons, and on par with analyst expectations in a poll from Reuters.

Production in Argentina was forecast at 43.5 million metric tons, unchanged from the previous month’s outlook but ahead of the trade outlook for 42.8 million tons.

Wheat for May delivery jumped 16¾¢ to $10.68¼ a bushel overnight on the Chicago Board of Trade while Kansas City futures added 17¼¢ to $11.24 a bushel.

Soybean futures for May delivery dropped 3¾¢ to $16.85¼ a bushel. Soymeal rose $1 to $469.20 a short ton, while soybean oil futures lost 0.51¢ to 74.61¢ a pound.

Corn futures gained 5½¢ to $7.74¼ a bushel. 

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2. Speculative Investors Raise Bullish Bets on Beans and Corn

Money managers raised their net-long positions, or bets on higher prices, in corn and soybeans in the seven days that ended on April 5, according to the Commodity Futures Trading Commission.

Investors held a net-349,104 corn-futures contracts last week, up from 341,639 a week earlier, the CFTC said in a report.

Speculators also increased their net-longs in soybeans, holding 156,811 futures contracts. That’s up from 151,028 futures contracts a week earlier, the government said.

Hedge funds and other large investors were mixed on wheat.

They held a net-45,193 hard-red winter futures contracts last week, up from 44,963 contracts, the agency said.

Soft-red winter wheat bucked the trend as speculators held a net-13,953 futures contracts last week, down from 19,645 contracts and the smallest such position since 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. Extremely Dry Weather Headed For Much of Central U.S.

It’s very dry in much of the central and western U.S. as red-flag warnings have been issued from southwestern Texas into southern South Dakota, according to the National Weather Service.

In southwestern Kansas, winds will be sustained from 20 to 25 mph with gusts of up to 35 mph this afternoon, the NWS said in a report early this morning.

Relative humidity is projected as low as 10%.

The warning in the area is in effect from 1 p.m. through 8 p.m. today and from noon to 9 p.m. Tuesday.

In the Oklahoma and Texas panhandles, winds will gust up to 65 mph, the agency said. Humidity will drop as low as 9%.

“A combination of strong winds, low relative humidity, and warm temperatures will create favorable weather for rapid fire growth and spread,” the NWS said.

In western North Dakota, meanwhile, a blizzard warning has been issued for Tuesday through Thursday with up to 20 inches of snow in the forecast.

Winds will gust as high as 50 mph.

“Travel will become very difficult to impossible,” the NWS said. “Widespread blowing snow could significantly reduce visibility.”

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