Last week’s supply and demand update from the U.S. government was a bit tough on corn and soybean bulls, but Chicago futures ended the week above report-day levels and speculators remain steadfastly optimistic in corn.
Investors are also still bullish soybeans, but that enthusiasm has waned to a greater degree and the recent government data supports that trend.
In the week ended Oct. 12, money managers cut their net long position in CBOT corn futures and options to 227,931 contracts from 250,596 a week earlier, according to data from the U.S. Commodity Futures Trading Commission.
That is slightly above the mid-September levels and still a bit more bullish than a year ago. Other reportable traders boosted their net long by 1,900 to 62,331 corn futures and options contracts, consistent with their views over the last month. (https://tmsnrt.rs/3lLUpOZ)
In CBOT soybeans, money managers slashed their net long to 29,068 futures and options contracts through Oct. 12 from 49,453 in the prior week; the new stance is their least bullish since August 2020.
Commercial end users had been critically short corn and soybeans late last year through mid-2021, but through Oct. 12 they established their first net long position in soybeans since March 2020.
Commercials still hold a sizable net short in corn and the position is nearly identical to a year ago, but they have at least halved what had been a record net short early in 2021.
The U.S. Department of Agriculture last week lifted the U.S. corn and soybean harvests, adding to the already expanding inventories. Stocks were not outside the range of expectations, though the stocks-to-use became quite a bit heavier than analysts had thought a month or two ago, particularly for soybeans.
Soybean traders have also been anxious for an increase in U.S. export sales to China. Several bookings to both China and unknown destinations came in Wednesday through Friday totaling 1.5 million tonnes.
That plus strength in soybean oil and technical buying lifted November soybeans SX1 1.6% over the last three sessions, settling Friday at $12.17-3/4 per bushel. Beans on Tuesday fell below $12 for the first time since December, though the most-active contract has not dipped under $11 since Nov. 9, 2020.
The most-active December corn contract CZ1 ended up fractionally the last three sessions, finishing at $5.25-3/4 per bushel. December corn has not dropped below $5 since Sept. 10.
SOYBEAN PRODUCTS, WHEAT
Soybean meal is the only grain or oilseed in which investors are sizably bearish. In the week ended Oct. 12, money managers increased their net short in CBOT soybean meal futures and options to 40,324 contracts from 32,064 a week earlier. The new stance is funds’ most pessimistic for the time of year.
Money managers trimmed their net long in CBOT soybean oil futures and options to 72,984 contracts, a reduction of about 2,200. But soybean oil futures BOv1 jumped 4% between Wednesday and Friday on strength in crude oil and other competing vegoils.
Friday’s close of 61.29 cents per pound in soybean oil is 85% higher than on the same date last year, but meal futures are 15% lower after ending the week at $316.60 per short ton.
Money managers remain firmly bullish toward the CBOT oilshare, a measure of soyoil’s share of value in soybean products. Their net long jumped about 6,000 contracts through Oct. 12 to 113,308 futures and options contracts.
USDA’s global wheat stock projection came in well below expectations, though CBOT wheat futures Wv1 slid 1.4% in the week ended Oct. 12.
Money managers in that period flipped to a net short of 8,546 CBOT wheat futures and options contracts from a net long of 5,212 a week earlier. That was mostly on the addition of new shorts.
They also shaved their net long in Kansas City wheat futures and options by 1,660 to 48,286 contracts, but lifted their net long in Minneapolis wheat to 15,896 futures and options contracts from 15,337 a week before.
Chicago futures were unchanged in the last three sessions while K.C. rose fractionally and Minneapolis was up 1.4%. Minneapolis wheat futures MWEZ1 on Friday reached a contract high of $9.80 per bushel, the strongest for the December contract since 2012.
Friday’s U.S. wheat market strength was supported by new contract highs in Paris-based Euronext wheat futures. That was sparked by increased Chinese interest in French wheat despite some quality issues caused by a rainy harvest.
Source: Reuters (Reporting by Karen Braun; Editing by Leslie Adler)