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3 Big Things Today, October 3, 2022

Grain Futures Rise Overnight; Investors Reduce Net-Longs in Corn, Beans

1. Wheat, Corn Futures Rise in Overnight Trading

Wheat and corn futures were higher in overnight trading while soybeans were little changed.

The U.S. Department of Agriculture on Friday said all wheat production in 2022 rose less than 1% year-over-year to 1.65 billion bushels, as yield was offset by fewer harvested acres.

The average yield was 46.5 bushels an acre, up from 44.3 bushels a year earlier, but harvested area dropped 4% to 35.5 million acres, the USDA said in a report.

Production was well below the government's August outlook for 1.783 billion bushels and forecasts by analysts polled by Reuters, who were expecting output of 1.778 billion bushels.

Winter-wheat production came in at 1.104 billion bushels versus forecasts for 1.191 billion. Hard-red winter output was reported at 531 million bushels, missing expectations for 573 million. Soft-red production was 337 million, well below expectations for 379 million bushels.

White-winter wheat production was 236 million bushels, behind analysts' forecasts for 238 million, and spring output was 482 million bushels, the USDA said, well below expectations in the Reuters poll for 514 million.

Stockpiles at the beginning of September were mixed with corn well below forecasts, soybeans above projections, and wheat on par with estimates.

Corn stocks on Sept. 1 were reported at 1.377 billion bushels, the government said, missing forecasts in a separate Reuters poll for 1.512 billion bushels. Soybean inventories came in at 274 million bushels, well above expectations for 242 million.

Wheat stockpiles were at 1.776 billion bushels, exactly what was forecast by analysts.

Wheat futures for December delivery jumped 10 ½¢ to $9.32 a bushel overnight on the Chicago Board of Trade, while Kansas City futures gained 11¢ to $10.02 ½ a bushel.

Corn futures for December delivery rose 6 ¼¢ to $6.83 ¾ a bushel.

Soybean futures for November delivery fell ¼¢ to $13.65 ½ a bushel. Soymeal dropped $1.50 to $401.50 a short ton, while soybean oil rose 0.45¢ to $62.01 a pound.

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2. Speculators Cut Bullish Bets on Corn and Beans

Money managers cut their net-long positions — bets on higher prices — in corn and soybeans last week, according to data from the Commodity Futures Trading Commission.

Investors lowered their bullish bets on corn to a net-224,362 futures contracts in the seven days that ended on Sept. 27, the CFTC said in a report.

That's down from 236,192 contracts a week earlier and the smallest such position in three weeks.

Speculators cut their net-longs in soybeans to 96,763 contracts last week from 107,484 contracts the previous week, the agency said. That's the smallest bullish position since July 26.

In hard-red winter wheat, however, investors increased their net-long positions to 23,704 contracts, up from 18,750 the previous week and the largest such position since June 28, government data shows.

Hedge funds and other large investment firms reduced their net-short positions — bets on lower prices — in soft-red winter wheat last week to 16,357 contracts.

That's down from 18,139 contracts a week earlier and the smallest bearish position for the grain since July 26, 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 Causes Fire Threat in Parts of Nebraska, Iowa

Dry weather will lead to extreme fire danger in parts of eastern Nebraska and western Iowa today, according to the National Weather Service.

"Fire danger is expected to reach into the very high category across most of the area today between noon and 6 p.m.," the NWS said in a report early this morning. "The high risk for fire will be highest in areas with dry grass or dry crop fields."

Further north, extremely cold weather is forecast in parts of Wisconsin later this week.

Widespread frost and potentially a hard freeze may hit the area Thursday or Friday, the agency said. There's also potential for a hard freeze Friday into Saturday. 

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