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3 Big Things Today, November 7, 2022

Wheat Futures Fall Overnight; Speculators Raise Net-Longs in Corn, Beans

1. Wheat Futures Decline in Overnight Trading

Wheat futures were lower while corn and soybeans were little changed in the overnight session as recent precipitation in parts of the U.S. Winter-Wheat Belt boosts soil moisture.

As much as six times the normal amount of rain fell in a wide stretch of land from Wisconsin to northern Oklahoma in the past week, according to the National Weather Service's precipitation page.

Rain fell over the weekend in some areas of the eastern Midwest where soft-red winter wheat is growing, stretching into northern Oklahoma.

Still, prices are being underpinned as much of southwestern Kansas, southeastern Colorado, and the western parts of the Oklahoma and Texas panhandles have seen little or no rain in the past seven days, NWS said.

Only 28% of the U.S. winter-wheat crop was rated good or excellent last week, down from 45% a year earlier, the Department of Agriculture said in a report.

About 87% of the crop was planted at the beginning of last week, almost on par with the prior five-year average of 85%. Sixty-two precent has emerged, behind the normal 66% for this time of year, the agency said.

USDA is scheduled to release its weekly crop progress report this afternoon.

Investors also may be squaring positions ahead of Wednesday's World Agricultural Supply and Demand Estimates (WASDE) report from USDA. The crop production and world agricultural production reports are also due this week.

Wheat futures for December delivery fell 5¢ to $8.42 ¾ a bushel overnight on the Chicago Board of Trade, while Kansas City futures dropped 3½¢ to $9.49 ¾ a bushel.

Corn for December delivery was down 1¼ ¢ to $6.79 ¾ a bushel.

Soybean futures for January delivery fell 2½¢ to $14.59 ½ a bushel. Soymeal rose 50¢ to $420.90 a short ton, while soybean oil gained 0.17¢ to 77.34¢ a pound.

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2. Investors Raise Bullish Bets in Corn and Beans

Speculators raised their net-long positions — bets on higher prices — in corn and beans last week, according to data from the Commodity Futures Trading Commission.

Hedge funds and other large investment firms held a net-261,512 corn futures contracts in the seven days that ended on Nov. 1, CFTC said in a report.

That's up from 248,886 futures contracts a week earlier, and the largest such position since the week ending on May 24.

Investors held 102,297 soybean futures contracts, up from 75,535 a week earlier, the largest bullish position since Sept. 20, the government said.

In wheat, speculators held a net-23,089 hard-red winter wheat contracts last week, down from 24,467 contracts a week earlier, CFTC said. That's the smallest such position since Sept. 20.

Holdings in soft-red winter wheat were little changed as investors held a net-short position, or bets on lower prices, of 36,705 contracts last week.

That's down from 36,777 contracts a week earlier, 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. Dry Weather Prompts Red-Flag Warnings in Parts of South Dakota

Dry weather is camped over parts of the Dakotas and Nebraska as strong winds and low humidity make for dangerous conditions, according to the National Weather Service.

Red-flag warnings have been issued from noon to 6 p.m. today for parts of southern South Dakota, NWS said in a report early this morning.

Winds will be sustained from 20 to 30 mph with gusts up to 40 mph expected. Relative humidity will fall as low as 18%.

In western Nebraska, a high-wind warning is in effect this morning as gusts of up to 60 mph are in the forecast, the agency said.

"The high winds may damage roofs, small outbuildings and signs," NWS said. "Power outages are possible. Travel could be difficult, especially for high-profile vehicles."

Further south, there's a "slight chance" for rain in the Oklahoma and Texas panhandles tonight into tomorrow, though the odds of severe weather are very low, the agency said.

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