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3 Big Things Today, December 13, 2021

Wheat Futures Decline Overnight; Investors Raise Net-Longs in Corn, Beans.

1. Wheat Futures Lower in Overnight Trading

Wheat futures declined in overnight trading as concerns about tight global supplies ease.

Australian farmers are in the process of harvesting what is expected to be a record crop.

The Australian Bureau of Agricultural and Resource Economics has said it expects a record 34.4 million metric tons of the grain to be harvested this year.

The U.S. Department of Agriculture said in its monthly World Agricultural Supply and Demand Estimates (WASDE) report last week that it now expects Australian output at 34 million metric tons, up from the November outlook for 31.5 million tons.

If realized, that would also be up from the 33.3 million metric tons harvested last year, according to the USDA.

Global production was pegged by the U.S. Ag Department last week at 777.9 million metric tons, up from the previous forecast for 775.3 million tons and the previous year’s 775.9 million tons.

The USDA raised its outlook for global ending stockpiles to 278.2 million metric tons from the November projection of 278.2 million tons. That would, however, be down from the 289.6 million tons in the previous marketing year, the agency said.

Corn and soybeans also were lower in overnight trading.  

Wheat futures for March delivery dropped 8¢ to $7.77¼ a bushel overnight on the Chicago Board of Trade, while Kansas City futures fell 8¢ to $7.97½ a bushel.

Corn futures for December delivery were down 3¢ to $5.87 a bushel.

Soybean futures for November delivery lost 8¢ to $12.59¾ a bushel. Soymeal was down $2.80 to $364 a short ton, while soy oil added 0.13¢ to 53.82¢ a pound.

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2. Speculators Raise Net-Long Positions in Corn and Beans

Investors raised their net-long positions, or bets on higher prices, in corn and soybeans last week, according to the Commodity Futures Trading Commission.

Speculators held a net-320,887 corn-futures contracts as of Dec. 7, up from 303,534 contracts a week earlier, the CFTC said in a report.

Hedge funds and other large investors held a 36,495 soybean-futures contracts last week, up from 31,074 the previous week.

It was the opposite in wheat as investors reduced their net-longs in hard-red winter futures while turning bearish on soft-red contracts, government data show.

Investors held a net-long position of 59,250 hard-red winter contracts last week, down from 61,915 contracts a week earlier, the CFTC said.

In soft-red winter wheat, money managers turned bullish, shifting to a net-short position, or bets on lower prices, of 1,154 futures contracts, the agency said.

That’s a shift from a net-long position of 4,882 contracts a week earlier and the first bearish position for the grain since the seven days that ended on Oct. 26, 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. Strong Winds Forecast From Kansas Through Iowa This Week

Strong winds are expected this week for a large chunk of the Southern Plains and western Midwest today, according to the National Weather Service.

In southwestern Kansas, where hard-red winter wheat is growing, winds starting Wednesday morning will be sustained from 35 to 45 mph with gusts of up to 65 mph, the NWS said in a report. In some areas, winds may top 70 mph.

A fire weather watch also is in effect for the area on Wednesday due to the strong winds and low relative humidity, which will drop as low as 11%.

“Damaging winds could blow down trees and power lines,” the agency said. “Widespread power outages are possible.”

In central Iowa, meanwhile, winds will be sustained from 25 to 35 mph with gusts of up to 65 mph on Wednesday, the NWS said.

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