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3 Big Things Today, February 28, 2022

Grains, Soybeans Jump Overnight; Investors Raise Bullish Bets in Corn, Wheat.

1. Grain and Soybean Futures Surge Overnight

Grain and soybean prices surged in overnight trading as the Russia-Ukraine conflict escalates.

European and U.S. leaders agreed to impose restrictions on the SWIFT payment system that’s used to settle trillions of dollars’ worth of global transactions.

Lines reportedly have formed at Russian banks and ATMs, reportedly, indicating a potential run on money.

Global governments have continued to increase the number of sanctions they’re imposing against Russia.

Russian President Vladimir Putin has put his country’s military on high alert as he believes foreign governments are being overly aggressive toward his country, despite the fact that he ordered the attack on Ukraine.

Fighting continued over the weekend with hundreds of troops reportedly killed on both sides. So far, according to media report, Ukraine has held some ground while losing other areas.

Wheat futures jumped amid the escalation on concerns about exports from both countries.

Russia is the world’s largest exporter of wheat, while Ukraine is the third-biggest. Ports are closed along the Black Sea and some buyers are actively avoiding grain from Russia.

Wheat for May delivery jumped 45½¢ to $9.05¼ a bushel overnight on the Chicago Board of Trade, while Kansas City futures were up 43¼¢ to $9.34¼ a bushel.

Corn futures for May delivery gained 24¼¢ to $6.80 a bushel. 

Soybean futures for May delivery surged 37¢ to $16.21½ a bushel. Soymeal was up $4.60 to $447.30 a short ton, and soybean oil futures added 2.76¢ to 71.69¢ a pound.

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2. Speculative Investors Raise Bullish Bets on Corn and Wheat

Money managers raised their net-long positions, or bets on higher prices, in corn and wheat futures while curbing their bullish bets on soybeans in the seven days that ended on February 22, according to the Commodity Futures Trading Commission.

Investors held a net-344,790 corn-futures contracts as of last week, the CFTC said in a report.

That’s up from 323,199 contracts the previous week and the largest such position since the week that ended on February 1.

In wheat, speculators held a net-long position of 40,364 hard-red winter wheat contracts, up from 35,725 contracts a week earlier, the agency said. That’s the largest such position since the week that ended on January 11.

Fund managers and other large investors held a net-short position, or bets on lower prices in soft-red winter wheat, though they reduced their bearish positions last week.

Investors held a net-19,518 short soft-red winter wheat contracts, down from 36,606 a week earlier and the smallest bearish position since January 25, the government said.

In soybeans, meanwhile, investors held a net-long position of 171,384 futures contracts, down from 172,853 contracts a week earlier, 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. Dry Weather Expected Monday in Parts of Midwest, Southern Plains

Dry weather in parts of the Midwest may lead to wildfires, according to the National Weather Service.

In northwestern and west-central Iowa, northeast Nebraska, and parts of southern North Dakota, temperatures today will be well above normal while winds will be strong, leading to the fire dangers this afternoon, the NWS said in a report early this morning.

It'll also be dry in the southern Plains today, with a light breeze and warm temperatures.

“Most areas (of the Oklahoma and Texas panhandles) will be warmer and dry, but a very light breeze out of the northeast will develop around midday in the western Oklahoma and far northwestern Texas panhandle,” the agency said.

The dry weather will elevate fire concerns in the region as relative humidity drops to as low as 10%.

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