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3 Big Things Today, March 21, 2022

Grains, Soybeans Surge Overnight; Investors Raise Bullish Bets on Corn.

1. Grain and Soybean Futures Surge in Overnight Trading

Grain and soybean prices jumped in overnight trading on concerns about global exports amid continued fighting in Ukraine.

Russia has reportedly bombed civilian targets in the Ukraine capital of Kyiv, government officials said, according to media reports. In Odesa, Ukraine, officials have said Russians are using unmanned aerial vehicles in the city.

Ukraine fighters refuse to give up control of the city of Mariupol.

Russia is the world’s biggest exporter of wheat, according to data from the U.S. Department of Agriculture.

The USDA lowered its outlook for exports from the country to 20 million metric tons in a report earlier this month from a February projection of 24 million tons.

Prior to the Russian attacks, Ukraine was expected to be the third-largest shipper of wheat, but is now forecast to be the fourth-biggest exporter behind Russia, Australia, and the United States.

India said it will increase shipments of the grain to account for the lack of supplies coming from Russia and Ukraine.

Soybean futures were higher partly on projections for prolonged drought in the western U.S. and higher-than-normal temperatures throughout much of the country this spring.

The National Oceanic and Atmospheric Administration said in a report issued last week that around 60% of the continental U.S. – basically the western half – has a good chance of drought the spring.

If realized, that would be the largest drought coverage since 2013, said Jon Gottschalck, the chief of the Operational Prediction Branch of NOAA’s Climate Prediction Center.

Wheat for May delivery jumped 27¢ to $10.90¾ a bushel overnight on the Chicago Board of Trade while Kansas City futures added 26½¢ to $10.97 a bushel.

Soybean futures for delivery rose 20½¢ to $16.88 a bushel. Soymeal was up $4.40 to $481.40 a short ton and soybean oil futures gained 1.79¢ to 74.08¢ a pound.

Corn futures for May delivery added 12¾¢ to $7.54½ a bushel. 

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2. Investors Raise Bullish Bets on Corn and Beans

Money managers raised their net-long positions, or bets on higher prices, in corn and beans last week, according to the Commodity Futures Trading Commission.

Investors held a net-361,250 corn-futures contracts in the seven days that ended on March 15, up from 355,824 contracts a week earlier, the CFTC said in a report.

That’s the largest bullish position since the week that ended on Feb. 1.

Speculators held a net-long position of 161,928 soybean futures contracts, up from 161,670 contracts the previous week, the government said.

In wheat, investors held 43,808 hard-red winter futures contracts last week, down from 44,396 contracts a week earlier. That’s the smallest such position in three weeks.

Fund managers and other large investors held a net-long position of 24,967 futures contracts in soft-red winter wheat, up from 21,757 contracts a week earlier.

That’s the largest such position since the seven days that ended on March 2, 2021, 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. Winter Storms Expected in Parts of the Southern Plains

Winter weather is sliding into the Southern Plains this morning and will move east through the Southern Plains today, according to the National Weather Service.

A winter-storm warning has been issued in southeastern Colorado and winter-weather advisories will take effect this afternoon in much of the Oklahoma and Texas panhandles, the NWS said in a report early this morning.

In eastern Colorado, heavy snow is expected today with accumulations of up to 9 inches possible, the agency said. Winds will gust up to 55 mph.

In the Oklahoma and Texas panhandles, snow accumulations will top out at about 2 inches, but winds also will gust as strong as 55 mph, the agency said.

“Plan on slippery road conditions,” the NWS said. “Strong winds could cause visibility to fall below 1 mile.”

Farther north in parts of South Dakota, meanwhile, wind advisories and high-wind warnings have been issued.

Sustained winds ranging from 30 to 40 mph with gusts of up to 60 mph are in the forecast, the NWS said. Some tree damage is expected and power outages are possible.

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