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3 Big Things Today, August 1, 2022

Grains, Soybeans Lower Overnight; Investors Raise Bullish Bets on Corn, Beans

1. Grain, Soybean Futures Drop in Overnight Trading

Grain and soybean futures plunged in overnight trading as exports begin flowing from Ukraine after months of being stalled due to Russia's invasion of the country.

The first ship hauling Ukraine grain has sailed form a port, Reuters reported. That should help alleviate food crises happening around the globe.

A deal was brokered between Ukraine and Russia by Turkey and the United Nations to get wheat and corn flowing from the war-torn country.

Prior to the start of the Russian attacks in February, Ukraine was projected to export 24 million metric tons of wheat, making it the third-largest shipper of the grain.

The U.S. Department of Agriculture earlier this month projected Ukraine wheat exports at 10 million metric tons.

While prices are falling in the overnight session, hot weather has moved into the central U.S. as expected. Heat advisories have been issued from Minnesota into Arkansas and from central Nebraska through central Iowa, weather maps show.

Little or no rain fell in much of the Dakotas, Iowa and Wisconsin in the past seven days, according to the NWS's precipitation page. Still, ample rain has fallen in a stretch of land that includes Colorado, Kansas, Missouri and southern Illinois and Indiana.

About 59% of the U.S. soybean crop was in good or excellent condition at the start of last week, down from 61% a week earlier. Around 61% of corn earned top ratings, down from 64% the previous week, the USDA said.

The agency is scheduled to update its crop progress report today.

Corn futures for December delivery dropped 14 1/2¢ to $6.05 ½ a bushel overnight on the Chicago Board of Trade.

Wheat for September delivery plunged 14¢ to $7.93 ¾ a bushel while Kansas City futures lost 14 1/4¢ to $8.60 ¼ a bushel.

Soybean futures for November delivery fell 21 1/2¢ to $14.47 a bushel. Soymeal dropped $5.20 to $413.30 a short ton, while soybean oil futures declined 1.21¢ to 64.45¢ a pound.

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2. Speculative Investors Raise Net-Longs in Corn, Beans

Money managers raised their net-long positions, or bets on higher prices, in corn and beans for the first time in several weeks, according to data from the Commodity Futures Trading Commission.

Investors held a net-111,784 corn-futures contracts in the week that ended on July 26, up from 103,315 contracts seven days earlier, the CFTC said in a report.

That's the first increase since June 14.

Speculators raised their bullish bets on soybeans to a net-85,962 contracts last week, up from 83,070 contracts, the agency said. That's also the first bump since mid-June.

In wheat, investors decreased their net-longs in hard-red winter futures to 10,893 contracts from 11,793 contracts a week earlier, the CFTC said.

That marks the smallest such position since April 13, 2021, government data show.

Money managers increased their net-short positions, or bets on lower prices, in soft-red winter wheat to 14,527 futures contracts last week, up from 11,553 contracts seven days earlier.

That's the largest bearish position since Feb. 22, 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.


3. Hot Weather Moves Into Central Corn Belt

Extremely hot weather is expected in the central Corn Belt as temperatures reach well into the triple digits, according to the National Weather Service.

Heat indexes in eastern Nebraska into west-central Iowa are forecast to hit as high as 110 degrees Fahrenheit today, the NWS said in a report early this morning.

A heat advisory has been issued start at 1 p.m. and ending at 8 p.m. tonight.

In central Missouri and counties in western Illinois, values are expected to reach 105 degrees today, the agency said.

Heat advisories have been issued from central Minnesota south into northern Arkansas and west-to-east from central Nebraska into western Illinois, NWS maps show.

In Montana, Wyoming and parts of western South Dakota, meanwhile, red-flag warnings are in effect due to extremely dry weather.

Winds in western South Dakota will be sustained from 10 to 20 miles an hour with gusts of up to 30 miles an hour forecast, the agency said. Relative humidity is projected to fall as low as 10%.

"The combination of gusty winds and low relative humidity will produce critical fire weather conditions," the NWS said.


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