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3 Big Things Today, March 12

Wheat Futures Lower Overnight; Money Managers Boost Bullish Corn, Bean Bets.

1. Wheat Lower Overnight on Record World Stockpiles Outlook

Wheat futures declined overnight on carryover selling from last week’s World Agricultural Supply and Demand Estimates (WASDE) that showed record global supplies.

The USDA last week said world stockpiles at the end of the marketing year on May 31 will total 268.9 million metric tons, up from 266.1 million a month earlier and the highest since record keeping started in 1960.

Global production of wheat will total 758.8 million tons this year, up slightly from the February projection, the USDA said. The government’s projection for use, meanwhile, was lowered to 742.5 million tons from 744.8 million a month earlier.

Wheat for May delivery fell 5¼¢ to $4.84 a bushel overnight on the Chicago Board of Trade, while Kansas City futures lost 6¢ to $5.14½ a bushel.

Soybean futures for May delivery fell a penny to $10.38¼ a bushel overnight. Soymeal lost $2 to $371.60 a short ton, and soy oil declined 0.07¢ to 31.52¢ a pound.

Corn futures for May delivery dropped 2¢ to $3.88½ a bushel overnight.


2. Speculators Push Bullish Bets on Corn to Highest Level in 20 Months

Bullish bets on corn last week surged to the highest level in 20 months, and net-long positions in soybeans were at their highest since January 2017, according to the Commodity Futures Trading Commission.

Money managers were net long by 163,614 corn contracts in the week that ended on March 6, the highest since June 2016, CFTC data show.

Speculators were held a net-long position of 177,831 soybean contracts last week, the biggest such position in more than a year, according to the government.

Investors have been more bullish on corn and beans lately due to extremely dry weather in Argentina, which is threatening global production.

Hard red winter wheat net longs totaled 19,401 contracts, up from 9,225 seven days earlier and the largest bullish stance since August. Investors were still net short soft red winter wheat by 21,600 contracts as of last week, the USDA said.

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.


3. Ongoing Dry Conditions Raise Risk of Wildfire in Southern Plains

While there’s no red-flag warning as of right now issued in the Southern Plains, conditions are ripe for wildfires, according to the National Weather Service.

“Elevated fire weather conditions are possible across the western Texas and Oklahoma panhandles due to low relative humidity and breezy winds,” the NWS said in a report early Monday morning.

Relative humidity will fall as low as 16%, while winds will be up to 18 mph in the region, elevating the fire threat.

The Southern Plains has received little to no rain in at least the past 90 days. The hard red winter wheat crop in the area was rated 50% poor or very poor, 37% fair, and 13% good or excellent last week, according to the USDA.

Topsoil moisture supplies were 76% short or very short, 23% adequate, and 1% surplus, the USDA said. Subsoil moisture was 73% short or very short, 27% adequate, and 0% surplus.

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