Speculators continue to show significantly more enthusiasm for Chicago-traded corn versus soybeans, and increasingly comfortable stockpiles of the oilseed may soon cause funds’ longstanding optimism to be washed away.
Although Chicago wheat futures have been on the rise since mid-month, investors’ positioning does not indicate they are expecting further upside.
In the week ended Oct. 19, money managers trimmed their net long in CBOT corn futures and options to 219,568 contracts from 227,931 a week earlier based on Friday’s data from the U.S. Commodity Futures Trading Commission.
That is identical with their year-ago stance, which was trending upward last October. Funds’ bullish corn views have not materially changed in about four months, and that is uncommon for the time of year given market sensitivity to the U.S. growing season and its results.
But the story is different in soybeans. Speculators have gotten more aggressive with short bets in the last two weeks, cutting down on the bulls’ edge. Money managers through Oct. 19 pared their soybean net long to 18,165 futures and options contracts, a reduction of nearly 11,000 on the week.
That is their least optimistic soybean view since June 2020. They have not held a net short since early 2020.
U.S. soybean export sales in the latest week hit the highest mark in just over a year based on a flurry of commitments from China. But there were no daily soybean sales over the past five trading days, meaning the next week of data will certainly not reflect similar numbers.
Soybean crush margins have greatly improved in China, increasing hopes for more bookings of the U.S. oilseed in the coming weeks. Both U.S. corn and soybean shipments have picked up from the logistical interruptions at the end of August, and corn sales have been running at more normal levels.
Most-active soybean futures Sv1 slipped fractionally over the last three sessions, but Friday’s settle of $12.20-1/2 per bushel is 3% above the month’s low, which was also a 10-month low.
CBOT Corn futures Cv1 finished at $5.38 on Friday, up 1.5% in the latest three sessions and 8% above the seasonal low set Sept. 10.
SOY PRODUCTS AND WHEAT
The soy complex has been supported in recent weeks by rising energy prices, and that has particularly bolstered global vegoil prices. Investors remain highly bullish CBOT soybean oil relative to soybean meal, but those views were little changed over the latest two weeks.
Most-active CBOT soybean oil futures BOv1 rose 6% in the week ended Oct. 19, and money managers increased their net long by more than 9,000 to 82,211 futures and options contracts.
Soyoil futures fell fractionally between Wednesday and Friday, but not before notching a near three-month high on Thursday of 65 cents per pound.
Soymeal futures SMv1 have come off one-year lows set earlier this month, rising 3% in the week ended Oct. 19 and another 1.5% through Friday. Funds cut down on their bearish meal views through Oct. 19, reducing their net short to 32,159 futures and options contracts from 40,324 a week prior.
CBOT wheat futures have risen over the last several sessions with the December contract WZ1 ending at $7.56 per bushel on Friday. That is up almost 3% over the last three sessions but 4% off the contract high set on Aug. 13.
Tight global wheat stocks and strong demand continue to be central to the wheat market, but speculators’ increasingly bearish position suggests they believe the risks have been comfortably priced in. Money managers lifted their net short in CBOT wheat futures and options to 17,738 contracts from 8,546 a week earlier.
Conversely, commodity funds remain strongly optimistic in Kansas City and Minneapolis wheat futures and options. Funds shaved their K.C. net long by less than 1,000 contracts through Oct. 19 to 47,390.
Their Minneapolis wheat net long edged upward for a fourth consecutive week, reaching 16,320 futures and options contracts, and increase of 424 contracts.
K.C. and Minneapolis wheat both reached contract highs on Friday. The most-active December K.C. contract KWZ1 hit $7.75 per bushel and Minneapolis futures MWEZ1 pushed past the $10-mark to $10.18 per bushel.
Source: Reuters (Reporting by Karen Braun; Editing by Matthew Lewis)