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3 Big Things Today, February 22, 2021

Grains, Soybean Futures Higher Overnight; Investors Raise Bullish Bets on Corn.

1. Grain and Soybean Futures Rise in Overnight Trading

Grain and soybean futures were higher in overnight trading as projections from the U.S. Department of Agriculture showed tight supplies at the end of the marketing year.

Strong exports will lead to a decline in both corn and soybean inventories this year.

Corn stockpiles at the end of the 2020-2021 marketing year on Aug. 31 are forecast at 1.6 billion bushels, the USDA said at its outlook forum last week.

Exports of the grain are pegged at 2.7 billion bushels due to “robust” demand from China.

Soybean stockpiles will fall to 145 million bushels, according to the USDA’s projections. The agency said it now expects soybean exports to reach 2.2 billion bushels, and that 80% of overseas cargoes forecast for the year have already been shipped.

Wheat inventories at the end of the grain’s marketing year on May 31 are pegged at 698 million bushels, down from 1.03 billion a year earlier and the lowest carryout since 2013-2014, government data show.

Prices rose despite weak export sales in the week through Feb. 11. Corn sales declined 31% week-to-week, soybean sales were down 43%, and wheat sales dropped 33%, according to the USDA.

Corn for March delivery rose 5¼¢ to $5.47 a bushel overnight on the Chicago Board of Trade. 

Wheat futures for March delivery added 2¼¢ to $6.57¾ a bushel, while Kansas City futures gained 4¼¢ to $6.42½ a bushel.

Soybean futures for March delivery gained 2¼¢ to $13.82¼ a bushel. Soymeal was down $1.20 to $422.40 a short ton, and soy oil added 0.02¢ to 46.91¢ a pound.

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2. Speculators Raise Bullish Bets on Corn to Highest Level in a Month

Money managers raised their net-long positions, or bets on higher prices, in corn to the highest level in a month while cutting their bullish positions in soybeans, according to the Commodity Futures Trading Commission.

Speculators increased their net longs in corn to 348,491 futures contracts as of Feb. 16, the CFTC said in a report.

That’s up from 340,376 contracts a week earlier and the largest such position since Jan. 12.

Large funds have been bullish on corn in recent weeks thanks to increased demand from China.

Investors, however, curbed their net-long positions in soybeans last week to 149,633 futures contracts, down from 159,544 contracts a week earlier, government data show.

In wheat, money managers raised their net longs in soft-red winter futures last week to 15,389 contracts from 13,240 seven days earlier, the agency said. That’s the largest such position since Jan. 5.

Specs held a net-long position of 56,676 hard-red winter wheat contracts as of Feb. 16, down from 59,452 contracts the previous week, 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 that more traders are betting on higher prices, while a net-short position means more are betting futures will decline.


3. Wind Warnings Issued Amid Strong Winds in Northern and Southern Plains

The deep freeze seems to be over in much of the Midwest, though strong winds will lead to reduced visibility in the Northern Plains and create potential fire hazards in the Southern Plains, according to the National Weather Service.

Much of North Dakota and South Dakota is facing wind advisories and high-wind warnings this morning.

In western South Dakota, northwest winds today will run from 30 to 45 mph with gusts of up to 60 mph forecast, the NWS said in a report early this morning. The high-wind warning begins at 8 a.m. and lasts until 5 p.m. local time.

“Travel could be difficult, especially for high-profile vehicles,” the agency said. “Strong winds can cause blowing dust, reduced visibility, and flying debris.”

In the Southern Plains, meanwhile, strong winds and low humidity are leading to increased risks of wildfires, the NWS said.

“Above-normal temperatures and breezy west winds will support very-high grassland fire danger this afternoon, especially across central Kansas,” the NWS said. “Outdoor burning is not recommended.”

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