FORT COLLINS, Colo. (Reuters) - Speculators are holding onto much more bullish views in Chicago-traded corn than traders expected following a historic dive in futures, though last week’s overall selling was on the heavier side with funds shedding length in corn, soybeans and soybean meal.
Collectively across CBOT grains and oilseeds and including Minneapolis wheat, the week ended May 18 was money managers’ largest net selling week in exactly a year. Their combined net long position fell to its lowest point since mid-October but remains elevated compared with prior years.
Money managers cut their net long in CBOT corn futures and options to 291,025 contracts through May 18 from 316,336 a week earlier based on data published Friday by the U.S. Commodity Futures Trading Commission.
July corn futures fell 9% during the week and new-crop December futures plunged 11%, both among the worst stretches on record. Trade estimates had pegged commodity funds to have dumped around 133,000 corn futures contracts in the period.
Long liquidation seemed like the most obvious culprit for the corn price correction through May 18, but it was a lot lighter than in the previous week, where heavy fund selling coincided with a rise in futures. Within the latest five weeks, money managers reduced their gross corn longs by 24%.
Other reportable speculators also contributed to the corn selloff last week, cutting their net long by 9%.
Drought-related losses for Brazil’s corn crop and China’s impressive buying streak of U.S. corn limited selling within the last three sessions and futures rose fractionally. However, funds are seen having sold nearly 23,000 corn futures between Wednesday and Friday.
CBOT corn has been pressured by the timely planting of the U.S. crop and the expectation for an increase in planted acres. Much-needed rain arrived at the end of last week for some parched areas of the Corn Belt, potentially improving early development.
SOYBEANS AND WHEAT
CBOT soybean futures were down to a much lesser degree through May 18 than corn with the most-active July contract losing 2.5%. But funds were just as aggressive sellers of soybeans as they were with corn.
Money managers cut their soybean net long to 152,584 futures and options contracts through May 18 from 177,822 a week earlier, and that was entirely on the reduction of gross longs. That was also their biggest net selling week since mid-July.
Soybean futures fell 3% between Wednesday and Friday and trade sources suggest commodity funds’ bullish views could be approaching the lightest levels since August. Price weakness has been attributed to disappointing demand and declines in the soy products as well as in oil markets.
Soybean meal futures tumbled 8% in the week ended May 18 as investors abandoned long positions. Money managers slashed their bullish bets to 50,845 futures and options contracts from 69,616 a week prior, their largest meal selling week since April 2020.
Soybean oil was the only CBOT contract that did not suffer sizable losses through May 18. Most-active futures were up 6% and topped 70 cents per pound for only the third trading day in history.
But money managers trimmed their net long in soybean oil futures and options to 83,220 contracts, a reduction of 2,630 on the week. Selling may have continued Wednesday through Friday as futures fell 4.6%, their worst stretch since early April.
Soybean meal dropped almost 3% in the last three sessions and on Friday settled below $400 per short ton for the first time since mid-April.
CBOT wheat futures plunged nearly 6% in the week ended May 18, but money managers raised their net long by just over 1,000 contracts to 14,040. Other market participants had a similarly quiet week and open interest fell 2%.
CBOT wheat was down another 3.4% over the last three days as the U.S. crop as well as other exportable global supplies are seen sufficiently large in the coming cycle. Top wheat supplier Russia said it may increase shipments in 2021-22 despite a smaller crop.
Scouts on an annual tour in top U.S. wheat state Kansas last week saw potential for very high yields and a bumper crop, although lower protein content is of concern. That pressured Kansas City wheat futures, which fell 3.7% in the last three sessions.
K.C. wheat had lost nearly 9% in the week ended May 18 and money managers reduced their net long to 26,100 futures and options contracts, down about 6,000 on the week. Their Minneapolis long was basically unchanged on the week at 16,415 contracts, and futures fell 1.9% over the next three sessions.
The opinions expressed here are those of the author, a market analyst for Reuters.
Editing by David Gregorio
May 24, 2021 at 03:59PM
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Column: Funds limit CBOT corn selling amid nose-dive in futures - Reuters
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