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3 Big Things Today, October 25, 2021

Wheat Futures Rise Overnight; Money Managers Curb Net-Longs in Beans.

1. Wheat Futures Rise in Overnight Trading

Wheat futures were higher in overnight trading on concerns about global supplies.

Russia has said it will again raise its export tax on wheat to $67 a metric ton from around $61, potentially driving overseas buyers to the U.S. for their grain.

Exports from Russia were pegged by the U.S. Department of Agriculture earlier this month at 9.5 million metric tons, down from a prior outlook for around 10 million tons. Last year, the country exported almost 12 million metric tons of wheat.

Also boosting prices overnight is signs of strong demand.

Importers are reportedly snapping up Australian wheat supplies as ports are backlogged through the end of the year, according to a report from Reuters. 

Black Sea wheat is more expensive, pushing buyers to  Australia, the report said, citing unnamed sources. 

Corn and soybeans also were higher in overnight trading  

Soybeans were following soy oil higher as prices continue to surge. The cost of soybean oil in China also is rising, boosting global cooking oil prices. 

Wheat futures for December delivery added 8½¢ to $7.64¾ a bushel overnight on the Chicago Board of Trade, while Kansas City futures gained 6½¢ to $7.80½ a bushel.

Corn futures for December delivery rose 2½¢ to $5.40½ a bushel.

Soybean futures for November delivery added 9½¢ to $12.40¼ a bushel. Soymeal gained $2.60 to $330 a short ton, while soy oil added 0.48¢ to 62.57¢ a pound.

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2. Speculators Cut Bullish Bets on Beans and Corn

Money managers cut their net-long positions, or bets on higher prices, in soybeans to the lowest level in almost 17 months while also reducing their bullish bets on corn, according to the Commodity Futures Trading Commission.

Investors in the seven days that ended on Oct. 19 held a net-15,274 soybean-futures contracts, down from 24,208 contracts a week earlier, the CFTC said in a report.

That’s the smallest bullish position since the week that ended on June 2, 2020, government data show.

Speculators also cut their net-longs in corn to 211,654 futures contracts last week. That’s down from 218,239 contracts a week earlier and the smallest such position since Sept. 21.

Investors have been less bullish on soybeans and corn as the U.S. harvest rolls on.

At the start of last week, 60% of the U.S. soybean crop was harvested, up from 49% a week earlier and the prior five-year average of 55%, according to the USDA.

About 52% of corn was in the bin as of Oct. 17, up from 41% a week earlier and the prior average of 41%.

In wheat, money managers held a net-46,506 soft-red winter futures contracts last week, down from 47,509 contracts a week earlier, the CFTC said.

That’s the smallest such position since Sept. 21.

Fund managers also held a net-short position, or bets on lower prices, of 19,498 soft-red winter wheat futures as of Oct. 19. That’s up from a bearish position of 9,980 futures contracts a week earlier, 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. Floods, Strong Winds Expected in Northern Illinois and Indiana

Flood warnings and watches and wind advisories have been issued for parts of northern Illinois and parts of northwestern Indiana this morning, according to the National Weather Service.

Rains will move across the area this morning and afternoon, the NWS said in a report early this morning.

Wind speeds will increase throughout the day, topping out at around 50 mph, the agency said. That will create flooding along the Lake Michigan shoreline.

“The strongest winds will likely occur between the early morning and early afternoon before decreasing substantially through the evening,” the NWS said. “Resulting high waves will likely cause some lakeshore flooding along Illinois and Indiana shorelines.”

In the southern Plains, meanwhile, fire weather watches are in effect due to extremely dry weather.

Winds in parts of western Kansas will be sustained from 25 to 35 mph with stronger gusts. Relative humidity is expected to drop as low as 13%, the NWS said.

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