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3 Big Things Today, January 31, 2022

Soybeans Surge in Overnight Trading; Speculators Raise Bullish Corn Bets.

1. Soybean Futures Jump in Overnight Trading

Soybean futures reached a seven-month high in overnight trading amid ongoing concerns about dry weather in South America.

The Rosario Grains Exchange in Argentina said in a report that water remains scarce in half of the country’s growing areas despite recent precipitation.

About 42% of soybeans are in “full fruition,” a critical growing period when rain is most needed, the exchange said in its report.

Less than 100 millimeters (3.9 inches) of rain have fallen in January in some areas, meaning the next two weeks will be very important, the report said.

“It must be taken into account that the average for January is 120 millimeters and many areas ended the first fortnight with empty soils, which, added to the extreme values ​​of temperatures, produced a deterioration in soybeans and corn that many agronomists describe as unprecedented,” the exchange said.

Rain that was expected this week likely won’t appear, and no precipitation is forecast until the middle of next week, the forecast said.

Prices also are following palm oil higher.

Malaysian palm oil futures reached a record Monday before falling back after Indonesia, the world’s largest maker of the cooking oil, said producers will be required to sell 20% of output to the domestic market. Palm oil competes directly with soybean oil.

Soybean futures for March delivery jumped 16¾¢ to $14.86¾ a bushel overnight on the Chicago Board of Trade. Soymeal was up $4.60 to $415.80 a short ton and soybean oil futures gained 0.67¢ to 65.94¢ a pound.

Corn futures for March delivery gained 2½¢ to $6.38½ a bushel.

Wheat for March delivery added 3¢ to $7.89¼ a bushel, while Kansas City futures rose 5¢ to $8.07¼ a bushel.

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

Speculative investors raised their net-long positions, or bets on higher prices, to the highest level this year while also increasing bullish bets on soybeans to the largest in almost eight months, according to the Commodity Futures Trading Commission.

Investors in the seven days that ended on Jan. 25 held a net-360,124 corn-futures contracts, up from 318,944 contracts a week earlier, the CFTC said in a report.

That’s the largest such position since the week that ended on Dec. 28.

Money managers held 108,003 soybean futures contracts last week, up from 98,451 contracts the previous week and the largest bullish position since June 8, the agency said.

Speculators also were more positive on wheat last week.

Fund managers held a net-39,380 hard-red wheat futures contracts last week, up from 35,364 contracts a week earlier, the government said.

In soft-red winter wheat, investors held a net-short position, or bets on lower prices, of 15,190 futures contracts as of Jan. 25.

That’s down from 28,385 contracts a week earlier and the smallest bearish position since the seven days that ended on Dec. 28, 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. Winter Weather Expected From Colorado Through Michigan

Weather maps are lit up like Christmas lights that need to come down as winter weather is expected in a large chunk of land stretching from eastern Colorado north and east into southern Michigan, according to the National Weather Service.

A winter-storm watch has been issued starting tomorrow and lasting through Thursday in parts of eastern Kansas and almost all of Missouri, the NWS said in a report early this morning.

Up to a foot of snow is possible in some areas whereas others may seen at least 6 inches, the agency said.

“Travel could be very difficult to impossible,” the NWS said.

In northern Illinois and Indiana, the winter weather is forecast to start on Wednesday where a mix of ice and snow are likely. As much as 4 inches of snow and ice are expected in the area.

In central Nebraska, meanwhile, a red-flag warning will be in effect from 11 a.m. through 6 p.m. tonight due to strong winds and low humidity.

Winds will be sustained from 20 to 25 mph while gusts of up to 35 mph are expected, the NWS said.

Relative humidity is forecast as low as 15%, creating tinderbox-like conditions, the agency said.

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