Speculators have generally been selling Chicago corn since U.S. farmers began planting efforts this spring, but uncertainty over U.S. crop conditions and weather outlooks have recently prevented fund selloffs.
Commodity funds last week had their biggest buying week of 2021 so far when combining CBOT corn, wheat, soybeans and soybean products. U.S. weather forecasts improved late last week and prices weakened, so associated selling may have offset the previous week’s buying.
CBOT corn futures CZ1 rose more than 4% in the week ended July 20, and money managers lifted their net long to 223,302 futures and options contracts from 208,799 a week earlier. That is according to data from the U.S. Commodity Futures Trading Commission.
Index traders lightened their long corn bets by 1% last week and other reportable speculators were net sellers of the yellow grain for a fifth consecutive week. Other traders’ net long is still average to above average for the time of year, but it has shrunk almost 60% since setting records in January.
Corn futures were under pressure late last week as extended forecasts eased up on earlier predictions for prolonged unfavorable heat in the U.S. Corn Belt. Friday’s forecast also increased rain totals, which are particularly important for filling soybean pods heading into August.
The export demand outlook for U.S. corn and soybeans has also come under question with China largely on the sidelines when it comes to new-crop purchases. Most-active Chinese corn futures DCCv1 on Friday hit their lowest levels since November and soybean meal demand there has been reportedly slower.
December corn CZ1 fell 4% over the last three sessions and November soybeans SX1 lost 2.6%. For soybeans, that was nearly identical to the gains through July 20 when speculators staged their biggest soybean buying week since April.
SOYBEANS AND WHEAT
Money managers added more than 13,000 futures and options contracts to their soybean net long in the week ended July 20, lifting it to 95,874 contracts. That is their most bullish view since mid-June and was largely the result of new longs.
Funds’ soybean optimism has been trending positively since late June. November soybean futures SX1 are up about 3% since then though they are nearly $1.30 per bushel off the early June contract high.
Their soymeal stance has been roughly unchanged since the end of May, though December futures SMZ1 are about 7% lighter since then. Soybean oil futures BOZ1 are more than 20% off the recent mid-June lows, but funds’ views are not largely different than they were then.
Money managers through July 20 extended their net long in soybean oil futures and options to 57,147 contracts from 48,927 a week earlier, their biggest buying week since April. They added nearly 5,000 contracts to their soybean meal long, raising it to 21,497 futures and options contracts.
CBOT wheat futures Wv1 jumped 10.5% in the week ended July 20, among the biggest five-day gains in recent years for the most-active contract. That was tied to extremely poor conditions for wheat in the northern U.S. Plains and Canada along with uncertainty for crops overseas.
Money managers were expected to have easily wiped out their Chicago wheat net short through July 20, but instead they increased it to 3,770 futures and options contracts from 23,636 a week earlier. Open interest remains historically light for the date, but it jumped 4.5% last week after earlier this month reaching the lowest levels since 2009.
Funds as of July 20 established their most bullish stance in Kansas City wheat futures and options in over two months, adding more than 6,000 contracts on the week to reach 27,745 contracts. Most of that was related to short covering, which was also true with CBOT wheat.
Money managers trimmed their net long in Minneapolis wheat futures and options to 8,860 contracts, a reduction of just 122 contracts. Minneapolis wheat MWEU1 surged more than 6% through July 20, including a contract high of $9.44-1/2 per bushel on July 19.
Both Kansas City and Chicago wheat futures lost more than 2% between Wednesday and Friday and Minneapolis was down 3.5%.
Source: Reuters (Reporting by Karen Braun; Editing by Matthew Lewis)