FORT COLLINS, Colo. (Reuters) - Speculators’ bullish bets in Chicago corn and soybeans have been oscillating at unusually high levels so far this year as global supplies are seen falling to multi-year lows. Fresh, supportive news was somewhat lacking last month, though concerns over crops in South America renewed price optimism late last week.
In the week ended March 2, money managers pared their net long in CBOT corn futures and options to 348,546 contracts from 361,151 in the prior week, according to data from the U.S. Commodity Futures Trading Commission.
Over the same period, funds also reduced their net long in CBOT soybean futures and options to 155,561 contracts from 172,364 a week earlier, their largest bean selloff in two months. That move was driven by the exit of gross longs, which dropped total longs as of March 2 to the lowest levels since August.
Although money managers did not establish a firm selling trend in corn and soybeans last month, other speculative traders have definitively shed optimism.
Other reportable traders through March 2 cut their net long in corn futures and options for a sixth consecutive week. They sold nearly 66,000 contracts within those six weeks, a third of their position, which was record-large in mid-January. Other traders’ bullish soybean views have declined 41% since then.
Market bulls were disappointed that China failed to follow up its massive January U.S. corn purchases with more big orders in February, though total export commitments for both U.S. corn and soybeans sit at record highs for the current marketing year.
But things are not seamless in South America. Brazil’s record-large soybean harvest is under way despite some notable delays, and the weather has turned dry for Argentina’s crops, which are in critical yield stages. Brazil’s heavily exported second corn crop is being planted late, raising yield risks down the road.
Most-active corn futures were mostly unchanged over the last three sessions while soybeans rose more than 1%, and commodity funds were seen as net buyers of both. However, the deferred contracts are gaining on the nearby ones as pressure mounts for huge U.S. harvests.
New-crop December futures hit a new contract high on Friday of $4.82-1/4 per bushel and settled near the highs. November soybeans failed to make new highs on Friday, but the settlement of $12.47-1/4 per bushel was the contract’s highest.
SOY PRODUCTS AND WHEAT
Money managers have maintained exceptionally bullish views in CBOT soybean oil futures and options over the last six months. In the week ended March 2, they reduced their net long to 108,081 contracts from 112,645 a week earlier, though they likely bought even more contracts back late last week.
Funds cut their net long in soybean meal futures and options by just over 4,000 contracts through March 2 to 65,424 contracts, and futures drifted fractionally lower between Wednesday and Friday.
Soybean oil futures surged 4.3% over the last three sessions, hitting 52.17 cents per pound on Friday, the most-active contract’s highest level since February 2013. Those gains were supported by a sharp rise in U.S. crude oil futures, which on Friday hit their highest mark in well over a year.
Money managers raised bullish bets in CBOT wheat futures and options through March 2 to 31,803 contracts, a four-month high, from 26,910 a week earlier. Their net long in Kansas City wheat fell nearly 1,500 futures and options contracts to 51,724.
The largest relative shift in wheat sentiment was in Minneapolis wheat futures and options, as money managers increased their net long to 14,101 contracts from 12,153 in the prior week. That followed four consecutive weeks of selling.
Traders had been concerned that poor sowing conditions in top wheat exporter Russia had compromised the crop, but state weather forecasters said late last week that ratings had dramatically improved due to the mild winter.
However, the U.S. crop is still being monitored following last month’s cold blast and ongoing dry conditions in some areas. Crop ratings in the Plains, including in top producer Kansas, declined in the latest week.
Most-active CBOT wheat futures fell 2% over the last three sessions, though the contract remains at an eight-year high for the time of year.
The opinions expressed here are those of the author, a market analyst for Reuters.
Editing by Matthew Lewis
March 08, 2021 at 04:59PM
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Column: Funds' bullish CBOT corn, soy views backed by S. America risks - Reuters
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