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3 Big Things Today, October 22

Wheat Futures Lower Overnight; Money Managers Bullish on Corn First Time Since June

1. Wheat Falls on Weak Demand For U.S. Supplies

Wheat declined overnight on signs of slack demand for U.S. supplies while corn and soybeans were little changed.

Accumulated exports of wheat since the start of the marketing year on June 1 are down 25% from the same timeframe a year earlier to 7.54 million metric tons, according to the Department of Agriculture.

Total commitments from overseas buyers to purchase U.S. supplies have dropped 18% to 12.2 million metric tons, the USDA said in a report.

Ample global supplies have left buyers with plenty of options with regard to sourcing their wheat this year. Still, weather problems in some countries including Australia, Russia and Ukraine have curbed output globally.

The USDA earlier this month lowered its outlook for world production slightly.

Wheat for December delivery lost 3 1/4¢ to $5.11 ½ a bushel overnight on the Chicago Board of Trade while Kansas City futures declined 3 1/2¢ to $5.12 ¾ a bushel.

Corn futures rose 3/4¢ to $3.67 ¾ a bushel overnight.

Soybeans for November delivery rose 1/4¢ to $8.57 a bushel. Soymeal futures fell 30¢ to $312.80 a short ton and soy oil added 0.05¢ to 29.19¢ a pound.


2. Speculators Turn Bullish on Corn First Time Since June, Reduce Net-Shorts in Soybeans

Money managers held net-long positions, or bets on higher prices, in corn futures for the first time since June, according to the Commodity Futures Trading Commission.

Investors were net long by 21,258 corn futures contracts in the week that ended on Oct. 16, the CFTC said in a report. That compares with a net-short position, or bets on lower prices, of 39,399 contracts seven days earlier and the first bullish position since the week that ended on June 5.

Speculators were still net-short on soybean futures, but by the lowest amount since the week that ended on June 19. Investors held 31,112 such positions as of last week, down from 39,691 contracts a week earlier, government data show.

Fund managers and other large stakeholders have become bullish on corn and less bearish on soybean futures after several weeks of excessive rain left producers unable to harvest their crops. The precipitation also led to increased incidence of quality and yield issues in many areas, especially in soybeans.

Since the rain ended, however, drier weather has prevailed in much of the Midwest, which has allowed growers to harvest their crops.

In wheat, investors bumped their net-long positions in hard-red winter wheat while reducing their bearish bets in soft-red winter, the CFTC said.

Money managers were net-long by 22,291 hard-red winter wheat futures contracts as of last week, up from 20,272 contracts the prior week.

Speculators lowered their net-short positions in soft-red winter wheat to 16,252 futures contracts, down from 18,098 contracts seven days earlier, according to the government.

 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.


3. Cold Weather Moves Into Parts of Ohio River Valley, Flooding Still a Problem in Iowa

A cold snap has moved into parts of Ohio, Kentucky, Tennessee and counties in extreme southern Indiana, Illinois and Missouri, according to the National Weather Service.

Freeze warnings are in effect in much of the aforementioned areas with temperatures overnight ranging from 27 to 32 degrees Fahrenheit, the NWS said in a report early Monday morning.

Frost advisories are also in effect in more western and southern parts of the affected area, the agency said.

In parts of eastern Iowa and western Illinois, meanwhile, flooding is still an issue along the Mississippi River and several smaller waterways. The good news is that the probability for any severe weather this week is low, the NWS said.

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