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3 Big Things Today, May 17, 2021

Wheat Futures Decline Overnight; Investors Reduce Bullish Bets on Corn.

1. Wheat Futures Lower, Corn and Beans Turn Higher

Wheat futures fell overnight as rain falls in parts of the southern Plains, providing moisture for growing hard-red winter crops.

Some parts of the region, however, may see severe weather from the thunderstorms.

The U.S. Department of Agriculture last week said the wheat crop in Kansas, the biggest producer of the grain, will grow 18% year-over-year to 331 million bushels.

The average yield is pegged at 48 bushels an acre, up from 45 bushels a year earlier, the USDA said. Harvested acres are seen at about 6.9 million, up from roughly 6.25 million last year.

About 38% of the U.S. winter-wheat crop was headed as of last week, which was behind the prior five-year average of 46%. The USDA will update its weekly crop progress report today.

The crop was rated 49% good or excellent last week, up from the previous week’s 48%.  

In Kansas, 28% was headed, well behind the average of 46% for this time of year. Around 53% of the crop was in good or excellent condition.

Wheat futures for July delivery dropped 5¼¢ to $7.02 a bushel overnight on the Chicago Board of Trade, while Kansas City futures lost 5¢ to $6.52¾ a bushel.

Corn and beans were little changed but moving higher.

Corn futures for July delivery gained 3¢ to $6.46¾ a bushel.

Soybean futures for July delivery added 6¢ to $15.92¼ a bushel overnight. Soymeal added $5.20 to $423.70 a short ton, while soy oil fell 0.2¢ to 67.38¢ a pound.

2. Investors Push Bullish Corn Bets to Lowest Since Last Year

Money managers cut their net-long positions, or bets on higher prices, in corn to the lowest level since the end of last year while raising bullish bets on beans.

Speculators held 311,523 net-long positions in corn futures as of May 11, according to the Commodity Futures Trading Commission.

That’s down from 355,499 futures contracts a week earlier and the smallest such position since the seven days that ended on December 29, the CFTC said in a report.

Investors held 167,128 soybean-futures contracts last week, up from 162,975 contracts the previous week, the agency said.

In wheat, hedge funds and other large money managers held a net-31,908 hard-red winter wheat futures contracts last week, down from 34,177 the previous week.

Investors held a net-6,084 soft-red winter futures contracts, up from 3,981 contracts the previous week, 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. Flooding, Strong Storms Hitting Parts of Oklahoma and Texas

Flood warnings and flash-flood watches are in effect In parts of Oklahoma and north Texas with several waterways overrunning or almost overrunning their banks, according to the National Weather Service.

The flash flood watch in the region will remain in effect until Wednesday morning as up to 8 inches of rain have already fallen in some parts of north Texas, the NWS said.

In the Oklahoma and Texas panhandles, meanwhile, severe thunderstorms are possible starting this afternoon.

“Large to very large hail and damaging winds are the main threats,” the NWS said. “Additionally, there is also the potential for an isolated tornado during the late afternoon and early evening hours.”

In the northern Corn Belt, meanwhile, isolated thunderstorms are possible in parts of northeastern Minnesota and northwestern Wisconsin this afternoon.

Severe weather isn’t expected, the agency said.

Storms also are possible in the area all week, with the best chances for more storms starting Wednesday evening, the NWS said in a report early this morning.

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