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3 Big Things Today, December 20, 2021

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

1. Wheat Futures Drop in Overnight Trading

Wheat futures plunged and soybeans and corn were lower in overnight trading amid rising concerns about the omicron variant of the coronavirus.

The strain is expected to become dominant in several countries with some countries imposing lockdown measures to slow the spread.

It’s not just commodities that are seeing losses – the Dow Jones Industrial Average, the S&P 500 and the Nasdaq were all down more than 1% in after-hours trading. The World Economic Forum in Davis was postponed due to uncertainty about the disease.

While wheat futures were down double digits overnight, soybeans and corn saw narrower losses.

Soybeans are being supported by signs of demand from overseas buyers.

China purchased 132,000 metric tons of U.S. soybeans and India bought 33,000 tons of soybean oil, all for delivery in the 2021-2022 marketing year, the U.S. Department of Agriculture said in a report on Friday.

On Thursday, the USDA said exporters reported sales of 20,000 metric tons of soybean oil to India, also for delivery in the current marketing year.

While wheat futures were lower overnight, dry weather is still a concern.

In the U.S. Southern Plains, drought conditions are widening, threatening the hard-red winter crop. In Kansas, the biggest U.S. wheat grower, 20.1% of the crop was suffering from drought conditions, up from 19.4% a week earlier, the U.S. Drought Monitor said.

That’s also up from 6.38% three months ago, the monitor said.

Wheat futures for March delivery plunged 11¼¢ to $7.63¾ a bushel overnight on the Chicago Board of Trade, while Kansas City futures lost 8¢ to $8.02 a bushel.

Soybean futures for November delivery fell 2¢ to $12.86½ a bushel. Soymeal was up $1 to $377.50 a short ton, while soy oil fell 0.96¢ to 53.01¢ a pound.

Corn futures for December delivery were down 3¢ to $5.90¼ a bushel.

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2. Speculative Investors Raise Bullish Bets on Corn, Beans

Money managers raised their net-long positions, or bets on higher prices, in corn and beans to the highest levels in three weeks, according to the Commodity Futures Trading Commission.

Investors held a net-335,472 corn-futures contracts in the seven days that ended on Dec. 14, the CFTC said in a report.

That’s up from 320,887 contracts a week earlier and the largest level since Nov. 23.

Speculators held 40,451 soybean-futures contracts last week, up from 36,495 contracts a week earlier and also the biggest such position since Nov. 23, government data show.

Investors weren’t as positive on wheat.

Fund managers and other large investment houses held a bullish position of 58,897 hard-red futures contracts last week, down from 59,250 contracts a week earlier, the CFTC said.

Speculators were bearish on soft-red winter wheat, holding a net-short position, or bets on lower prices, of 9,517 futures contracts as of Dec. 14.

That’s up from a net-short position of 1,154 contracts a week earlier and the largest bearish position since the week 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. Wind-Chill Advisories in Effect in North Dakota

With Christmas less than a week away, weather maps are relatively quiet.

Wind-chill advisories are in effect until 10 a.m. Central Time in parts of North Dakota, according to the National Weather Service.

Wind chills overnight fell as low as -30°F., the NWS said in a report early this morning.

“The dangerously cold wind chills could cause frostbite on exposed skin in as little as 30 minutes,” the agency said.

In the Southern Plains, meanwhile, fire conditions will be elevated this week.

Winds will be strong and humidity will be low, making conditions ripe for wildfires this week.

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