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3 Big Things Today, July 25, 2022

Grains, Soybeans Jump Overnight; Investors Slash Net-Longs Across the Board

1. Grains, Soybeans Jump After Russian Attack on Ukraine Port

Grain and soybean futures surged in overnight trading after Russia attacked the port of Odesa in Ukraine, throwing into jeopardy an agreement that would allow Ukrainian grain to be shipped overseas.

Ukraine and Russia agreed to the deal that was brokered by Turkey and the United Nations toward the end of last week, increasing optimism that stranded Ukrainian agricultural supplies would finally make it to foreign buyers and help alleviate food crises globally.

Russian forces, however, attacked the southern port of Odesa after earlier in the months-long war firing missiles into grain fields, according to media reports.

Ukrainian President Vologymyr Zelenskyy said the attacks were an "act of barbarism," though Moscow said it merely attacked Ukrainian forces that were in the port city.

Grain shipments from Ukraine have been drastically reduced since Russian forces began attacking the country in February.

The deal brokered last week was still somewhat tentative as Russian attacks on Ukraine continue. In a speech at the signing of the treaty, United Nations Secretary-General Antonio Guterres called the agreement "an unprecedented agreement between two parties engaged in a bloody conflict."

Wheat for September delivery jumped 20 1/4¢ to $7.79 ¼ a bushel overnight on the Chicago Board of Trade while Kansas City futures added 20 1/4¢ to $8.40 ½ a bushel.

Corn futures for December delivery surged 10 1/2¢ to $5.74 ¾ a bushel.

Soybean futures for November delivery were up 12¢ to $13.27 ¾ a bushel. Soymeal gained $4 to $386 a short ton, while soybean oil futures fell 0.17¢ to 57.7¢ a pound.

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2. Investors Cut Net-Long Positions in Grains and Beans

Money managers last week again reduced their net-long positions, or bets on higher prices, in corn and soybean futures, according to data from the Commodity Futures Trading Commission.

Investors held a net-103,315 corn-futures contracts as of July 19, the CFTC said in a report.

That's down from 128,524 contracts a week earlier and the fifth straight decline, and marks the smallest net-long position since Sept. 29, 2019.

Speculators also reduced their net-longs in soybeans, which fell to 83,070 futures contracts from 90,735 contracts the previous week, the agency said.

That's also the fifth consecutive drop and marks the smallest bullish position since Dec. 21 of last year, the CFTC said.

In wheat, investors cut their bullish bets on hard-red winter futures to a net-11,793 contracts last week, down from 16,324 a week earlier. That's the ninth straight week of declining net-longs and the smallest such position since April 13, 2021.

Money managers increased their net-short positions, or bets on lower prices, in soft-red winter wheat last week to 11,553 futures contracts from 10,434 contracts, the government said.

That's the biggest bearish position since the week that ended on Feb. 22, the CFTC said in its report.

The weekly Commitment 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. Excessive Heat Expected in Eastern Oklahoma, Western Arkansas

Excessive heat warnings have been issued for much of eastern Oklahoma and parts of western Arkansas as temperatures remain well into the triple digits, according to the National Weather Service.

Heat indexes in parts of eastern Oklahoma are forecast to hit as high as 112 degrees this afternoon, the NWS said in a report early this morning.

Actual temperatures will range from 105 to 108 degrees Fahrenheit.

"Hot temperatures and high humidity will combine to create a dangerous situation in which heat illnesses are possible," the agency said.

Heat advisories have been issued in much of Arkansas and Louisiana where values are expected to hit as high as 110 degrees this afternoon, the NWS said.

Further north, flood watches are in effect in a large swath of land stretching from northeastern Missouri to southern Indiana.

In central Illinois and southern Indiana, up to 3 inches of rain are possible in some areas, leading to flooding of streams and creeks, the agency said.

"Flash flooding caused by excessive rainfall continues to be possible," the NWS said. "Excessive runoff may result in flooding of rivers, creeks, streams and other low-lying and flood-prone locations."

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