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3 Big Things Today, October 31, 2022

Grains, Beans Jump Overnight; Investors Raise Net-Longs in Corn

1. Grain and Soybean Prices Surge in Overnight Trading

Wheat, corn, and soybean futures were all higher in overnight trading after Russia ended an agreement allowing ships to transport agricultural products out of Ukraine.

Russia exited the deal — called the Black Sea Grain Initiative — for an indefinite period. The agreement was brokered by the United Nations and Turkey at the end of July and was designed to improve the flow of agricultural products globally to ease hunger.

Drone attack on Russian ships in Sevastopol, the home of its Black Sea fleet, were repelled on Saturday, Russian government officials said. Russia said it could no longer guarantee the safety of civilian vessels in shipping lanes.

The United Nations said in a statement Sunday that about 97 loaded ships and 15 inbound ships registered for inspections with the United Nations' Joint Coordination Centre, or JCC. Another 89 ships have applied to join the initiative.

While there was no movement through the so-called humanitarian corridor on Sunday, 21 vessels registered under the agreement were near the three Ukrainian ports from which ships have sailed, carrying more than 700,000 metric tons of agricultural products, the UN said.

Roughly 9.52 million metric tons of grains and food products were shipped from Ukrainian ports under the Black Sea Grain Initiative, the United Nations said in its statement.

All hope is not lost, however. Despite its exit from the agreement, Russian officials have agreed to continue negotiations with UN and Turkish officials.

"The Secretariat, in close cooperation with the Turkish delegation at the JCC, continues to engage all representatives to offer options on next steps regarding the JCC operations in accordance with the goals and provisions stated in the Initiative," the United Nations said. "In order to continue fulfilling the Initiative, it was proposed that the Turkish and United Nations delegations provide tomorrow 10 inspection teams aiming to inspect 40 outbound vessels. This inspection plan has been accepted by the delegation of Ukraine. The Russian Federation delegation has been informed."

Wheat futures for December delivery jumped 46½¢ to $8.76 a bushel overnight on the Chicago Board of Trade, while Kansas City futures rose 40½¢ to 9.65 ½ a bushel.

Corn for December delivery surged 15½2¢ to $6.96 ¼ a bushel.

Soybean futures for January delivery added 8¼¢ to $14.08 ½ a bushel. Soymeal gained $2.70 to $428.10 a short ton, while soybean oil rose 1.26¢ to 73.05¢ a pound.

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2. Speculators Boost Bullish Bets on Corn, Beans

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

Investors held a net-248,886 corn-futures contracts as of Oct. 25, up from 239,358 contracts a week earlier, CFTC said in a report.

In soybeans, speculators held 75,535 futures contracts last week, up from 66,749 contracts, clawing back to a three-week high.

Hedge funds and other large firms, however, were not as optimistic about wheat prices.

Speculative investors reduced their bullish bets on hard-red winter wheat to 24,467 contracts last week from 26,136 the previous week, the agency said.

That's the smallest such position in a month.

Money managers increased their net-short position, or bets on lower prices, in soft-red winter wheat futures to a net-36,777 contracts in the week through Oct. 25.

That's up from 23,020 contracts a week earlier and the largest bearish position for the grain since the seven days that ended on June 20, 2020, 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 Nebraska, Rain Forecast For Oklahoma

Dry weather will lead to wildfire risks in parts of western and central Nebraska today, according to the National Weather Service.

Low humidity will increase the risk of fires, though winds should be mostly light, which will help limit the spread of fires in the area, NWS said in a report early this morning.

Conditions are forecast to turn drier tomorrow as winds will gust up to 25 mph.

Further south, in much of Oklahoma, thunderstorms are expected later this week, which may bring heavy rainfall to the state, the agency said. That could give recently planted hard-red winter wheat a boost.

"The weather will become active late in the week and into the weekend as a potent storm system is expected to impact the region," NWS said. "Several rounds of showers and storms are likely, with locally heavy rainfall possible. Severe weather will also be possible during this time."

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