September 27, 2023

1. Grains, Soybeans Surge as Russia Exits Initiative

Grains and soybeans surged in overnight trading after Russia said it was pulling out of the Black Sea Grain Initiative that allows agricultural products to be safely shipped from Ukraine. 

The agreement, which was originally brokered last July and extended several times in the past year, was set to expire tomorrow. 

Russian officials said today that it would no longer comply with the rules of the agreement.  

Dmitry Peskov, a Kremlin spokesman, reportedly told the state-run TASS news agency the deal was “terminated” but that Russia, which began attacking Ukraine in February 2022, is willing to rejoin the initiative should its demands be met. 

Moscow has long complained that western countries and the United Nations haven’t held up their end of the agreement involving Russian shipments of agricultural products, including fertilizer. 

Almost 33 million metric tons of agricultural products were shipped from Ukraine under the agreement, according to data from the UN. Corn was by far the largest commodity exported, followed by wheat. 

Corn futures for December delivery rose 7 cents to $5.20¾ a bushel overnight on the Chicago Board of Trade. 

Wheat futures for September delivery gained 19¾ cents to $6.81¼ a bushel while Kansas City futures were up 14½ cents to $8.43½ a bushel. 

Soybeans for November delivery jumped 16 cents to $13.86¾ a bushel. Soymeal added $4.90 to $405.90 a short ton and soy oil gained 0.96 cents to 61.72 cents a pound. 

2. Investors More Bearish on Corn, Less Bullish on Beans

Speculators raised their net-short positions, or bets on lower prices, in corn while reducing their bullish bets on beans in the week that ended on July 11, according to the Commodity Futures Trading Commission. 

Investors held a net-short 56,167 futures contracts in corn, up from 7,359 contracts a week earlier, the CFTC said in a report. 

That’s the largest net-short position since May 23. 

Money managers were still bullish on soybeans, though less so than the previous week, lowering their net-long positions, or bets on higher prices, to 84,244 futures contracts from 90,193 the previous week. 

That’s the smallest such position in three weeks, the agency said. 

In wheat, investors were more bullish on hard red winter futures, raising their net-longs to 15,168 contracts from 14,502 contracts a week earlier, the government said.

Hedge funds and other large investors reduced their bearish bets in soft red winter futures, lowering their net-short positions to 54,409 contracts form 56,399 contracts the previous week, 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.

3. Heat Wave Will Persist in Parts of Kansas, Oklahoma

Extreme heat is expected again in parts of several states including Kansas, Oklahoma, Texas, and Arkansas, according to National Weather Service maps. 

Heat indexes in central and southern Kansas are forecast to hit as high as 107° F today, the NWS said in a report early this morning. 

Values in eastern Oklahoma and much of Arkansas will reach up to 110° this afternoon. 

Those working outside are advised to take extra precautions and, if possible, do any outdoor work or activities in the early morning or evening. 

Air quality alerts have been issued for much of Iowa, parts of Illinois, and almost the entire state of Indiana, NWS maps show, as smoke from Canadian wildfires continue to move down into the U.S.  

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