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3 Big Things Today, October 10, 2022

Grains, Beans Jump Overnight; Investors Cut Net-Longs in Soybean Futures

1. Grains, Soybeans Surge in Overnight Trading

Grain and soybean futures jumped in overnight trading after reports of blasts in several cities including Kyiv, the capital of Ukraine, leading to concern about global supplies of agricultural products.

Several cities were hit in what likely are among the most widespread attacks by Russian forces since their invasion of Ukraine started back in February, according to several media reports.

Central Kyiv was hit and at least eight people were killed in a single district, the BBC report. Power outages were widespread, though the subway in Kyiv resumed service earlier today.

Russian President Vladimir Putin is expected to hold a meeting with top officials today.

The attacks intensify concerns that exports of agricultural products including wheat and corn out of Ukraine will slow. Putin has in the past couple months questioned an agreement put in place in late July under which Ukraine grain shipments are allowed past Russian blockades.

The deal is tentative, and Russian forces have suffered several embarrassing losses in recent weeks in its war on Ukraine, leading some to speculate Putin will end the grain-shipping deal that was brokered by Turkey and the United Nations.

Prices also rose overnight on speculation that the U.S. Department of Agriculture will reduce its outlook for yield and production for both corn in a report this week.

Analysts polled by Reuters are expecting the USDA to forecast U.S. corn yield at 171.8 bushels an acre and production of 13.885 billion bushels. That's down from the previous outlook for 172.5 bushels an acre and 13.944 billion bushels, respectively.

Soybean output is likely to be projected at 4.381 billion bushels on yield of 50.5 bushels an acre, the analyst said in the Reuters poll. That would be little changed from the previous month.

Corn ending stocks likely will be pegged at 1.124 billion bushels, down from 1.219 billion estimated last month. Wheat inventories likely will be seen at 554 million bushels, down from the September forecast for 610 million bushels.

Soybean inventories probably will be projected at 248 million bushels, up from last month's forecast for 200 million bushels, according to the poll.

Wheat futures for December delivery jumped 41 3/4¢ to $9.22 a bushel overnight on the Chicago Board of Trade, while Kansas City futures surged 35 3/4¢ to $10.05 ½ a bushel.

Corn futures for December delivery were up 11 1/4¢ to $6.94 ½ a bushel.

Soybean futures for November delivery added 28 1/4¢ to $13.95 ¾ a bushel. Soymeal gained $7.10 to $407.80 a short ton, while soybean oil rose -0.51¢ to $67.11 a pound.

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2. Speculators Cut Net-Longs in Beans to Lowest Level This Year

Investors cut their net-long positions, or bets on higher prices, in soybeans to the lowest level this year while narrowly raising bullish bets on corn and hard-red winter wheat, according to data from the Commodity Futures Trading Commission.

Hedge funds and other large investment firms cut their net-long in beans to 77,361 contracts in the seven days tat ended on Oct. 4, the CFTC said in a report.

That's down from 96,763 contracts a week earlier and the smallest such position since Dec. 21.

Speculators, however, raised their net-longs in corn to 228,821 futures contracts last week, up from 224,362 contracts the previous week, the government said.

In wheat, money managers raised their bullish bets to a net-25,559 futures contracts from 23,704 contracts a week earlier. That marks the largest bullish position since June 21, agency data show.

Investors also were less bearish on soft-red winter wheat, reducing their net-short positions, or bets on lower prices, to 12,688 futures contracts last week. That's down from 16,357 contracts a week earlier and the smallest such position since July 19, 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. Dry Weather Expected in Parts of Nebraska, Kansas Monday

Extremely dry weather may lead to wildfires in parts of southern Nebraska and northern Kansas today and tonight, according to the National Weather Service.

Winds in the area are expected to gust up to 25 miles an hour, the NWs said in a report early this morning. The dry weather is forecast to last through Thursday.

"Warm temperatures, low humidity and breezy southwest winds will lead to at least near-critical fire weather conditions Tuesday afternoon along and west of Highway 281," the agency said.

In southern Kansas, meanwhile, thunderstorms are possible this afternoon.

Hail is a possibility and likely will range from nickel- to quarter-sized and winds will top out around 60 miles an hour, the NWS said.

Storms also will be possible over parts of eastern Missouri and western Illinois starting late tonight, the agency said.

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