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3 Big Things Today, April 16

Wheat Futures Lower Overnight; Money Managers Raise Bullish Bets on Grains.

1. Wheat Declines to Lowest in More Than a Week on Rain Forecast

Wheat futures dropped to the lowest in 10 days on forecasts for rainfall in the Southern Plains and signs of weak demand.

As much as 1½ inches of rain is forecast in the region in the four- to five-day weather outlook, according to the National Weather Service. That would give hard red winter wheat crops in the area a much-needed drink of water.

The area has seen little to no rain for at least three months, according to the NWS. Southwestern Kansas and the Oklahoma and Texas panhandles are in an exceptional or extreme drought, the worst ratings possible, according to the U.S. Drought Monitor.

Price also may be declining on signs of slack demand for U.S. wheat. The USDA last week said exporters sold 120,700 metric tons of the grain to overseas buyers, and while that wasn’t a marketing-year low, it was down 46% from the previous four-week average.

Wheat for May delivery dropped 4¾¢ to $4.6 ¾ a bushel overnight on the Chicago Board of Trade. Kansas City futures lost 10¼¢ to $5.04¾ a bushel.

Corn futures lost 1¾¢ to $3.84½ a bushel overnight.

Soybean futures for May delivery gained a penny to $10.55¼ a bushel in Chicago. Soy meal added 70¢ to $383.50 a short ton, and soy oil fell 0.14¢ to 31.34¢ a pound.

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2. Money Managers Increase Net Longs in Corn, Hard Red Winter Wheat

Money managers increased their net-long positions, or bets on higher prices, in corn and hard red winter wheat last week while slightly reducing their bullish stance on soybeans.

Speculative investors were net long by 169,785 corn contracts as of April 10, up from 138,245 contracts seven days earlier, according to the Commodity Futures Trading Commission.

Investors were net long by 32,286 hard red winter wheat contracts as of last Tuesday, up from 19,976 contracts the prior week, the CFTC said in a report.

Wheat futures had been rising due to extremely dry weather in the Southern Plains, but prices have dropped to the lowest in more than a week after the USDA increased its forecast for both domestic and international supplies.

Speculators were net long soybeans by 169,539 contracts as of last week, the fourth straight weekly decline, down from 172,429 contracts seven days earlier, the CFTC said.

Soft red winter wheat investors were net short by 44,861 contracts, down from the prior week’s position of 71,963 contracts, according to the government.

The Weekly Commitment of Taders 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. More Winter Weather on Way in Northern U.S., Dry Conditions Persist in Southwest

Winter weather continues in the northern U.S. while extremely dry weather envelops much of the southwest.

A new winter storm watch starting tomorrow has been issued for parts of northern Iowa and southern Minnesota that could produce several inches of snow and strong winds, according to the National Weather Service.

The storm may bring up to 8 inches of snow and ice accumulations of a tenth of an inch, the NWS said in a report early Monday morning. The areas affected stretch from southeastern South Dakota into west-central Iowa, the agency said.

In the Southern Plains, it looks dry again with a red-flag warning stretching from central Colorado south to the Mexican border and west through almost all of Arizona.

In the Oklahoma and Texas panhandles, sustained winds are pegged at 22 mph while relative humidity will fall as low as 5%, creating very dangerous fire conditions, the NWS said. High temperatures are expected to reach the mid-80s.

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