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3 Big Things Today, February 7, 2022

Soybeans, Grains Surge Overnight; Speculators Raise Bullish Bets on Corn, Beans.

1. Soybeans and Grains Jump in Overnight Trading

Soybean and grain futures surged in overnight trading on concerns about South American weather, tensions between Russia and Ukraine, and signs of demand for U.S. supplies.

Little rain and hot temperatures are expected in Argentina this week, and heavy rains in northeastern Brazil are threatening to stall fieldwork and in some areas may flood fields, Commodity Weather Group said.

Rain fell last week in Paraguay and southern Brazil, but it was too late to boost soy yields, the forecaster said.

The Buenos Aires Grain Exchange in Argentina last week cut its outlook for soybean production to 42 million metric tons from a prior forecast for 44 million metric tons due to severe drought the past two months.

The Rosario grains exchange last month cut its production estimate 11% to 40 million metric tons.

The U.S. Department of Agriculture in January projected soybean output in Argentina at 46.5 million metric tons, down from 49.5 million tons the previous month. The agency is scheduled to update its forecast on February 9.

French President Emmanuel Macron is heading to Moscow to meet with Russian President Vladimir Putin today in a bid to further de-escalate the situation.

Officials from Ukraine, the United States, and now France have met with Russia in a bid to stop an invasion of Ukraine. Russia now reportedly has more than 100,000 troops amassed along its border with Ukraine.

On the demand front, meanwhile, U.S. exporters on Friday reported sales of 295,000 metric tons of soybeans to unnamed countries, according to the Department of Agriculture.

That marked the sixth straight business day the USDA reported sales to overseas buyers.

Soybean futures for March delivery jumped 21¾¢ to $15.75¼ a bushel overnight on the Chicago Board of Trade. Soymeal was up $6.20 to $450.10 a short ton and soybean oil futures added 0.14¢ to 65.5¢ a pound.

Corn futures for March delivery added 8¼¢ to $6.28¾ a bushel.  

Wheat for March delivery surged 7½¢ to $7.70¾ a bushel, while Kansas City futures added 9½¢ to $7.95¼ a bushel.

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

Money managers last week raised their net-long positions, or bets on higher prices, in corn to the highest level in more than nine months, according to the Commodity Futures Trading Commission.

Investors held a net-368,829 corn-futures contracts in the seven days that ended on February 1, the CFTC said in a report.

That’s up from 360,124 contracts a week earlier and the largest such position since April 20, the agency said.

Speculators also raised their bullish bets on soybeans last week to a net-149,444 futures contracts, up from 108,003 contracts the previous week. That’s the largest net-long positions since May 11.

In wheat, meanwhile, hedge funds and other large investors held a net-37,412 hard-red winter futures contracts last week, down from 39,380 contracts a week earlier, the government said.

Investors held a net-short position, or bets on lower prices, of 29,130 soft-red winter wheat contracts, the CFTC said. That’s up from 15,190 bearish contracts seven days earlier and the largest such position in three weeks, 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. Cold Weather Persists in Parts of Illinois

Weather maps of the U.S. seem relatively quiet after last week’s storms, though some windy and cold weather is expected in parts of the Midwest this week, according to the National Weather Service.

In parts of central and western Illinois, wind chills this morning and again tonight are forecast to fall as low as -5°F., the NWS said in a report early this morning.

Some ice also may form as freezing drizzle continues through daybreak along parts of northeastern Interstate 90, the agency said.

In parts of central Nebraska, meanwhile, winds tomorrow will strengthen throughout the morning to around 25 mph with gusts of up to 40 mph.

“This will lead to elevated fire weather conditions for areas where there is no snow on the ground,” the NWS said.

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