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3 Big Things Today, February 14, 2022

Soybean Futures Plunge in Overnight Trading; Investors Cut Bullish Grain Bets.

1. Soybean Futures Drop in Overnight Trading

Soybean futures plunged in overnight trading as the early harvest rolls on in parts of South America.

Growers in Brazil had collected almost 27% of their soybeans as of Friday, according to consultancy Safras and Mercado, well ahead of the 7.1% that was harvested at the same time last year.

Yields thus far have been strong, the group said.

The harvest in Brazil, the world’s largest exporter of the oilseeds, likely will crimp demand for U.S. supplies.

Still, projections for the South American country’s crop have been coming down in recent weeks.

The U.S. Department of Agriculture said last week it now expects Brazilian production at 134 million metric tons, down from the previous outlook for 139 million tons.

Brazil’s AgRural said on January 31 it sees output at 128.5 million metric tons, down from a prior forecast for 133.4 million metric tons.

For now, at least, demand for U.S. supplies remains strong.

Exporters on Friday reported sales of 108,000 metric tons to China in the 2022-2023 marketing year, 128,000 metric tons of corn to Japan, and 30,000 tons of soybean oil, both in the current marketing year.

That marked the 11th straight day the USDA reported sales of 100,000 metric tons or more of U.S. agricultural products to overseas buyers.

Soybean futures for March delivery dropped 26½¢ to $15.56½ a bushel overnight on the Chicago Board of Trade. Soymeal was down $9.60 to $447 a short ton and soybean oil futures lost 0.27¢ to 65.45¢ a pound.

Corn futures for March delivery fell 4¼¢ to $6.46¾ a bushel.  

Wheat for March delivery rose 2¢ to $7.99¾ a bushel, while Kansas City futures rose 3¾¢ to $8.28 a bushel.

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2. Money Managers Curb Bullish Bets on Corn and Wheat

Investors reduced their net-long positions, or bets on higher prices, in corn futures to the lowest level in three weeks while also turning less bullish on wheat, according to the Commodity Futures Trading Commission.

Money managers held a net-334,450 corn-futures contracts in the seven days that ended on February 8, the CFTC said in a report.

That’s down from 368,839 contracts the previous week and the lowest since January 18.

Speculators held a 34,038 hard-red winter wheat contracts last week, down from 37,412 contracts the previous week and also the smallest such position in three weeks, government data show.

In soft-red winter wheat, investors held a net-short position, or bets on lower prices, of 31,969 futures contracts last week, up from 29,130 contracts a week earlier. That’s the largest bearish position since July 2020.

Soybeans bucked the trend as speculators were more bullish last week.

Hedge funds and other large investors held a net-164,336 soybean futures contracts as of February 8, up from 149,444 contracts a week earlier, the CFTC said.

That’s the largest such position since May 11, the government said.

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. Dry Weather Forecast For U.S. Southern Plains Monday

Fire-weather watches have been issued for much of the U.S. southern Plains due to extremely dry weather, according to the National Weather Service.

Winds are expected to be sustained from 20 to 30 mph with gusts of up to 40 mph, the NWS said in a report early this morning. Relative humidity is forecast as low as 8%.

The watches will be in effect from noon to 7 p.m.

In north-central Kansas, winds will top out at 35 mph while humidity will be between 15% and 22%, the agency said.

“Any fires that ignite may spread rapidly and exhibit extreme fire behavior,” the NWS said. “Use extreme caution if engaging in activities that could lead to fire ignition.”

In the northern Plains, meanwhile, a wind-chill advisory has been issued for eastern North Dakota and western Minnesota.

Values this morning are expected to fall as low as -35°F., the NWS said.

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