3 Big Things Today, April 12, 2021

Soybeans, Wheat Lower Overnight; Speculators Reduce Net Longs in Corn Futures.

1. Soybeans and Wheat Drop After WASDE Report

Soybeans were lower in overnight trading after Friday’s World Agricultural Supply and Demand Estimates (WASDE) report showed the government’s stockpiles outlook was unchanged.

Inventories at the end of the marketing year on August 31 were pegged by the U.S. Department of Agriculture at 120 million bushels, on par with previous month’s forecast.

That outlook, however, missed expectations for a decline to 119 million bushels.

What futures also plunged overnight after the report, in which the USDA pegged inventories of the grain at 852 million bushels, ahead of trade expectations for 847 million bushels and well above the previous estimate of 836 million bushels.

Domestic corn stocks, however, were pegged at 1.35 billion bushels vs. expectations for 1.39 billion and the previous month’s projection of 1.5 billion bushels.

That’s underpinning corn prices this morning.

Global corn inventories are seen by the government at 283.9 million metric tons, just under analysts’ forecasts for 284.5 million and USDA’s previous outlook for 287.6 million metric tons.

Soybean stockpiles worldwide at the end of the 2020-2021 marketing year were pegged at 86.9 million metric tons, ahead of the trade outlook for 83.5 million tons and the prior forecast for 83.7 million tons, the agency said.

Wheat inventories globally are expected at 295.5 million tons, the USDA said in its report, below trade forecasts for 301.3 million tons and the government’s previous projection of 301.1 million.

Soybean futures for May delivery fell 9½¢ to $13.93½ a bushel overnight on the Chicago Board of Trade. Soymeal rose 50¢ to $401.70 a short ton, and soy oil dropped 0.79¢ to 52.06¢ a pound.

Wheat futures for May delivery lost 7½¢ to $6.31¼ a bushel, while Kansas City futures lost 4¼¢ to $5.82¼ a bushel.

Corn futures for May delivery rose 1¢ to $5.78¼ a bushel.

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2. Investors Curb Net Longs in Corn While Increasing Bullish Bean Bets

Money managers reduced their net-long positions in corn from multiyear highs while increasing bullish bets on soybeans, according to the Commodity Futures Trading Commission.

Investors in the seven days that ended on April 6 held a net 379,642 futures contracts in corn, the CFTC said in a report.

That’s down from 387,698 futures-only contracts the previous week.

Speculators did the opposite with beans, raising their net longs to 141,143 futures contracts, the agency said. That’s up from 133,775 contracts a week earlier.

For wheat, investors were less bullish on hard-red contracts while turning less bearish on soft-red winter futures last week, government data show.

Money managers held a net-long position of 13,935 hard-red winter-wheat contracts, down from 21,185 contracts a week earlier.

They reduced their net shorts in soft-red winter wheat to 12,008 futures contracts from 19,105 contracts the previous week, the CFTC said in its report.

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. Dangerously Dry Weather Expected in Parts of the Northern Plains

Strong winds and dangerously dry weather will hit much of the Dakotas today, according to the National Weather Service.

In parts of central and western South Dakota, northwest winds are expected to be sustained from 25 to 35 mph with gusts of up to 45 mph, the NWS said in a report early this morning.

Some areas could see gusts of up to 55 mph.

The high-wind warning is in effect until 6 p.m. Mountain Time.

In western South Dakota, meanwhile, winds will gust up to 50 mph and relative humidity will drop as low as 25%, creating conditions ripe for wildfires.

“The grassland fire danger index will reach the extreme category this afternoon,” the NWS said. “Extreme weather conditions or a very low moisture content of grasses and other organic material on the ground indicate that burning conditions exist.”

In eastern Iowa, meanwhile, temperatures will drop into the upper 30s overnight, which could produce some frost in areas.

The Mississippi River and several of its tributaries continue to flood due to recent rainfall in the area.

Near Cape Girardeau, Missouri, the river was at 29.2 feet on Sunday afternoon, nearing flood stage of 32 feet. The Mississippi River is forecast to top flood stage tomorrow afternoon and peak on Friday at 36 feet, the NWS said.

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