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3 Big Things Today, April 20, 2020

Wheat Futures Jump Overnight; Money Managers Increase Bearish Bets on Corn.

1. Wheat Futures Jump as Russia Reportedly Bans Exports

Wheat futures soared in overnight trading after Russia reportedly decided to ban exports later this year.

Russia, the world’s biggest wheat exporter, will stop exports of the grain starting July 1, Reuters reported, citing the country’s deputy agriculture minister.

Its government had been considering a ban on wheat exports for some time to ensure ample domestic supplies amid the COVID-19 pandemic, which according to Johns Hopkins University has now infected more than 2.41 million people and killed almost 166,000 globally.

In the U.S., there are now 769,786 cases, and the death toll has now topped more than 40,000. That’s up from Friday’s tally of about 662,000 cases and 29,000 deaths.

Ukraine likely will suspend wheat exports if sales top agreed-upon limits with traders, the news company said last week.

With Russia and Ukraine potentially out of the picture, it’s likely some importers of the grain will turn to the U.S. for supplies, potentially reducing ending stockpiles that are now pegged by the USDA at 970 million bushels.

Wheat futures for May delivery jumped 12¢ to $5.45¾ a bushel overnight on the Chicago Board of Trade, and Kansas City futures surged 11½¢ to $4.96¾ a bushel.

Corn futures fell 1¾¢ to $3.20½ a bushel overnight.

Soybean futures for May delivery lost 3½¢ to $8.38 ¾ a bushel overnight, while soy meal was unchanged at $293.10 a short ton, and soy oil dropped 0.31¢ to 26.36¢ a pound. 

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2. Money Managers Were Less Optimistic on Corn and Bean Prices Last Week

Money managers increased their net-short positions, or bets on lower prices, on corn while reducing their bullish bets on soybeans last week, according to the Commodity Futures Trading Commission.

Investors held a net-short position of 137,294 corn futures contracts as of April 14, up from 110,220 contracts a week earlier, the CFTC said in a report.

That’s the largest such position since the week that ended on November 19.

Speculators were less bullish on soybeans, reducing their net-long positions, or bets on higher prices, to 11,447 futures contracts last week, down from 17,007 contracts seven days earlier, the agency said.

That’s the smallest bullish position since March 24.

Investors have been less optimistic about corn and soybean prices amid the spread of the COVID-19 virus, which has curbed demand for commodities globally.

In wheat, speculative investors were net long by 25,786 soft red winter contracts as of April 14, down slightly from 27,270 contracts a week earlier.

Money managers held 5,137 net-long positions in hard red winter wheat last week, up from 1,969 contracts, the CFTC said. That’s the most bullish investors have been on hard red futures since February 25, government data show.

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3. Red-Flag Warning Issued For Large Chunk of Land in Nebraska, Iowa, and Minnesota  

A red-flag warning is in effect from southern Nebraska northeast into central Minnesota this morning amid low humidity and strong winds, according to the National Weather Service.

In northeastern Nebraska, northwestern Iowa, and southern Minnesota, relative humidity will be as low as 20% today, the NWS said in a report early this morning.

Winds will be sustained from 20 to 30 mph with gusts of up to 45 mph in the area.

“Any fires that develop will likely spread rapidly,” the agency said in its report.

Farther east in northern Indiana and southern Michigan, an isolated thunderstorm is possible, the NWS said.

Temperatures may drop to “several degrees below freezing” tomorrow night with frost possible in the area, the agency said.  

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