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3 Big Things Today, January 24, 2022

Wheat Futures Rise Overnight; Investors Cut Net-Longs in Corn, Beans.

1. Wheat Futures Higher in Overnight Trading

Wheat futures were higher in overnight trading amid ongoing tensions between Russia and Ukraine, two of the world’s largest exporting countries.

Around 100,000 Russian troops have reportedly amassed at the Ukraine border. NATO countries are sending fighter jets to the country in case Russia attacks.

The U.S. reportedly told nonessential staff to leave Ukraine, though it’s not yet considered an evacuation. Britain has started withdrawing embassy staff from Ukraine, the BBC reported.

Russia is expected to export 35 million metric tons of wheat in the 2021-2022 marketing year, according to the U.S. Department of Agriculture.

If Moscow starts a war in Ukraine, there’s little doubt one of the first actions taken by governments would be to sanction Russian products, including wheat.

That would reduce the amount available on the global stage and likely would mean improved export opportunities for exporters including the U.S.

Ukraine wheat exports also likely would be hurt if Russia attacks. The country is forecast to export 24.2 million metric tons of wheat this year, the USDA said.

Wheat for March delivery jumped 6¢ to $7.86 a bushel overnight on the Chicago Board of Trade, while Kansas City futures added 9½¢ to $8.02¾ a bushel.

Soybean futures for March delivery fell 5½¢ to $14.08¾ a bushel overnight. Soymeal lost 10¢ to $392.60 a short ton, and soybean oil futures dropped 0.55¢ to 62.45¢ a pound.

Corn futures for March delivery fell 2¼¢ to $6.14 a bushel.

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2. Speculators Curb Net-Long Positions in Corn and Beans

Money managers reduced their net-long positions, or bets on higher prices, in corn and beans in the seven days that ended on January 18, according to the Commodity Futures Trading Commission.

Investors held 318,944 corn-futures contracts last week, down from 334,776 contracts the previous week, the CFTC said in a report.

That’s the smallest bullish position since the week that ended on November 30.

Speculators held a net-98,451 soybean-futures contracts last week, down from 107,278 contracts a week earlier, the smallest such position in a month, the agency said.

In wheat, investors held 35,364 hard-red winter contracts, down from 42,055 contracts the previous week and the smallest such position since the seven days that ended on July 27.

Fund managers continued to be bearish on soft-red winter wheat, holding a net-short position, or bets on lower prices, of 28,385 futures contracts, down from 31,202 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.


3. Wind-Chill Advisories, Warnings Issued for Northern Plains

Wind-chill warnings and advisories are in effect in much of the U.S. Northern Plains as values today are expected to hit as low as -45°F., according to the National Weather Service.

Wind chills in parts of North Dakota, Minnesota, and northeastern South Dakota are expected to drop throughout the day.

An advisory started at 6 a.m. this morning in eastern North Dakota and will last until 9 p.m. tonight when the wind-chill warning will take effect, lasting until noon tomorrow, the NWS said in a report early this morning.

“The dangerously cold wind chills could cause frostbite on exposed skin in as little as five to 10 minutes,” the agency said.

In western Kansas, meanwhile, a winter-storm watch has been issued.

Up to 5 inches of snow – potentially more in some places – are expected in several counties tomorrow. Roads are expected to be slippery and caution is warranted, the NWS said.

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