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3 Big Things Today, January 10, 2022

Soybeans Lower, Grains Little Changed Overnight; Investors Reduce Net Longs in Corn.

1. Soybean Futures Lower in Overnight Trading

Soybean futures were modestly lower in overnight trading while grains were little changed.

Prices were down on some technical selling after an increase in the previous session and ahead of this week’s World Agricultural Supply and Demand Estimates (WASDE) report from the U.S. Department of Agriculture.

From a fundamental standpoint, now much has changed.

Prices may be lower on technical selling but dry weather in parts of South America is still underpinning prices.

Brazil’s AgRural lowered its outlook for production in Brazil, the world’s largest soybean exporter, to 133.4 million metric tons, down from 144.7 million tons.

About 15% of the country’s crop is blooming, the consultancy said.

Drought stress in Argentina, meanwhile, is expected to expand from about 40% of growing areas to more than 75%, Commodity Weather Group said in a report on Friday.

Rain is expected in the 16- to 30-day outlook for southern Brazil and much of Paraguay, the forecaster said. Still, there’s a chance of “minor” delays in northern Brazil’s early harvest.

Showers also are expected to east dryness in parts of Uruguay and parts of Argentina, CWG said.

Soybean futures for March delivery dropped 4¢ to $14.06¼ a bushel overnight on the Chicago Board of Trade. Soymeal was unchanged at $425 a short ton and soy oil rose 0.13¢ to 58.91¢ a pound.

Corn futures for March delivery rose ¼¢ to $6.07 a bushel.

Wheat futures for March delivery fell 1½¢ to $7.57 a bushel, while Kansas City futures lost 4¼¢ to $7.70¾ a bushel.

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2. Investors Curb Net Longs in Corn, Raise Bullish Bean Bets

Money managers reduced their net-long positions, or bets on higher prices, in corn while reducing bullish bean bets, according to the Commodity Futures Trading Commission.

Investors held a net-355,355 corn futures contracts in the seven days that ended on Jan. 4, the CFTC said in a report. That’s down from 362,531 contracts a week earlier.

Speculators held 100,284 net-long soybean futures last week, up from 99,106 contracts a week earlier, the agency said.

That’s the largest bullish position in beans since the week that ended on June 15, government data show.

In wheat, meanwhile, investors held 51,190 hard-red winter wheat futures contracts, down from 58,583 contracts a week earlier. That marks the smallest such position since the week that ended on Oct. 19.

Fund managers and other large investors remained bearish on soft-red winter wheat, holding a net-short 22,707 futures contracts last week.

That’s up from a bearish position of 14,174 contracts the previous week, the agency 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. Extreme Cold Continues in Northern Midwest

Extreme cold is again expected in much of the northern Midwest today, according to the National Weather Service.

In northern Minnesota, a wind-chill warning is in effect as values are expected to drop as low as -45°F., the agency said.  The warning is in effect until noon.

“The dangerously cold wind chills could cause frostbite on exposed skin in as little as 10 minutes,” the NWS said in a report early this morning.

In North Dakota, meanwhile, wind chills will range from 25°F. to 40°F., the agency said.

Light snow is expected in parts of southern Michigan and northern Indiana today and tonight. Accumulations should top out around an inch, the NWS said.

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