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3 Big Things Today, October 17, 2022

Wheat Surges Overnight; Investors Raise Corn Net-Longs to Four-Month High

1. Wheat Futures Jump in Overnight Trading

Wheat futures surged in overnight trading on concerns that a deal allowing Ukraine grain to pass through Russian blockades will come to an end as tensions between the countries ins.

Corn and soybeans were little changed.

Russian President Vladimir Putin and several of his top officials have said in recent weeks that they want to eliminate or renegotiate a grain deal that was signed in July that allows Ukrainian agricultural products to flow out of the war-torn country.

Putin suggested on Friday that the haven corridors through which the products are shipped are being used for nefarious purposes. A bridge connecting the Crimea region to Russia was bombed last week, prompting Moscow to accuse Kiev of a "terrorist act."

Still, an official the United Nations, which, along with Turkey, brokered the agreement, told Politico that the deal not only wouldn't be canceled, but would instead be expanded.

"Some of this is potentially about positioning, but I don't believe it's about really trying to stop the initiative," Amir Mahmoud Abdulla, the UN's coordinator for the Black Sea Grain Initiative, told Politico. He said it's in the best interest for all of the countries involved to expand the deal.

The agreement was put in place to help alleviate global food crises.

Exports from Ukraine in the first 17 days of October totaled 2.12 million metric tons of grain, down only slightly from pre-war levels, the Ministry of Agriculture said today.

Shipments are now up to 10.8 million metric tons so far in the 2022-2023 marketing year that started on July 1, the ministry said. That compares with exports of 16.5 million tons during the same timeframe a year earlier.

Wheat futures for December delivery jumped 15 ½¢ to $8.75 ¼ a bushel overnight on the Chicago Board of Trade, while Kansas City futures added 13 ¼¢ to $9.65 ½ a bushel.

Corn futures for December delivery were down ½¢ to $6.89 ¼ a bushel.

Soybean futures for November delivery fell 1¢ to $13.82 ¾ a bushel. Soymeal fell $1.10 to $410 a short ton, while soybean oil gained 0.65¢ to $65.95 a pound.

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2. Speculators Raise Bullish Bets in Corn to Four-Month High

Money managers raised their net-long positions — bets on higher prices — in corn to the most in more than four months while reducing their bullish bets on beans, according to the Commodity Futures Trading Commission.

Investors held a net 254,553 corn-futures contracts as of Oct. 11, up from 228,821 contracts a week earlier, the CFTC said in a report.

That's the largest such position since the seven days that ended on May 24.

Speculators, however, reduced their bullish bets on soybeans to a net 65,606 futures contracts last week, the agency said. That's the smallest such position since Dec. 14.

In wheat, hedge funds and other large firms raised their net-longs in hard-red winter futures to 26,458 contracts from 25,559 contracts seven days earlier, the government said.

That's the largest bullish position since the seven days that ended on June 21.

Investors were more bearish on soft-red winter futures, raising their net-short positions, or bets on lower prices, to 19,889 contracts last week.

That's up from 12,688 contracts a week earlier and the largest bearish position since Sept. 13, 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. Freeze Warnings Issued From Colorado to Eastern Seaboard

Freeze and frost warnings have been issued for a wide stretch of the U.S. from Colorado almost to the Atlantic Ocean, and from southern Nebraska into the Gulf states, according to the National Weather Service.

In western and southern Kansas, temperatures overnight were forecast to fall as low as 28 degrees overnight, the NWS said in a report early this morning.

Temperatures in Missouri were expected to fall as low as 20 degrees overnight, the agency said. Another freeze is expected tonight.

Sub-freezing temperatures around 27 degrees are expected in parts of central Illinois and Indiana tonight, the NWS said.

A winter-storm warning has been issued for parts of northern Wisconsin that will last through 7 p.m. tonight.

"Snow and some blowing and drifting snow expected," the NWS said.

Snow accumulations of up to 6 inches are in the forecast along with winds gusting up to 35 mph, the agency said.

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