Funds dump CBOT corn, soy in selloff but remain wary of short bets -Braun
Speculators downsized their bullish bets in Chicago grain and oilseed futures late last month amid a historically large drop in prices, and relatively supportive data from the U.S. government late last week, especially for soybeans, seemingly did nothing to stop the selling trend.
CBOT December corn futures CZ2 plunged 6% in the week ended June 28, and November soybeans SX2 fell 3.2%, though both contracts traded down as much as 8% at different points in the period. Speculative selling was a bit heavier than expected.
Money managers reduced their net long position in CBOT corn futures and options to 228,615 contracts through June 28 from 265,264 a week earlier, the new stance their least bullish since October. That is according to data published Friday by the U.S. Commodity Futures Trading Commission.
They also cut their net long in CBOT soybean futures and options to 124,498 contracts, the lowest since January, down from 154,413 in the prior week. The combined selling across corn and soybeans was the equivalent of 333 million bushels, the most for any week since November.
Money managers’ corn and soybean selling did not include a notable increase in gross short positions, which otherwise may have signaled confidence in the downside move. They actually covered some shorts in corn and added a relatively small amount in soybeans.
Late June is a typical time for index traders to trim up their positions, but the 14% decline in their overall corn positions was a bit larger than usual. They cut their soybean bets by 12%, closer to norms.
Money managers’ corn views remain in line with the year-ago, though further selling likely ensued late last week as December futures fell another 7.8% in the last three sessions. They ended at $6.07-1/2 per bushel Friday, dipping to the lowest point since March 1 and the lowest for the most-active contract since January.
That pressure came despite a neutral stocks and acres report from the U.S. Department of Agriculture on Thursday, which included an extremely bullish forecast for U.S. soybean acres. That number fell below any pre-report analyst guess, but soybeans sold off hard late Thursday and especially Friday.
November soybeans shed 4.6% over the last three sessions, including more than 4% on Friday, when the contract dropped to the lowest levels since Feb. 4. Friday’s settle of $13.95-1/4 per bushel was more than $1 off Thursday’s high.
Much of last week’s selling has been attributed to uncertainty in outside markets, especially regarding recession concerns and a possible slowdown in demand. Traders will be watching the U.S. weather forecast for Tuesday morning’s open, but that already added to the negative mood Friday.
Friday’s outlook showed needed rainfall for a large portion of the U.S. Corn Belt this week, and even though a drier pattern was possible next week, significant, long-lasting heat was not on tap.
SOYBEAN PRODUCTS AND WHEAT
Money managers reduced their bullish CBOT soyoil views to a two-year low of 33,605 futures and options contracts as of June 28, down from 50,886 a week earlier and only a third as large as when futures made their highs in late April.
December soybean oil SMZ2 fell 5.1% in that week and continued down another 6.6% through Friday, reaching the lowest level since Feb. 16. Heavy pressure was also a theme late last month for competitor vegoil Malaysian palm oil futures, as June’s price declines were the steepest since October 2008.
CBOT soybean meal futures were down fractionally through June 28, and money managers added just over 2,000 futures and options contracts to their net long, reaching an eight-week high of 62,457.
The opposite trends in the soy products meant that funds’ views in the CBOT oilshare, which measures soyoil’s share of value in the products, reached the most bearish level since April 2020. Oilshare Friday fell to its lowest since mid-February.
Large open interest declines in grains and oilseeds are usually observed near the end of June, but CBOT wheat open interest in futures and options dropped to the lowest levels for any time of year since May 2009. That probably explains the lighter position trim despite a 5.2% fall in futures.
Money managers sold CBOT wheat futures and options for a sixth consecutive week through June 28, reducing their net long to 1,020 contracts from 3,935 a week earlier. They have not held a pessimistic view since the start of March, early in the Russian invasion of Ukraine.
Most-active Chicago wheat futures on Friday hit the lowest point since Feb. 22, two days before the invasion began. The September contract WU2 settled at $8.46 per bushel Friday, capping off a near 10% loss over the last three sessions, more than $4 off the May high.
Source: Reuters (Reporting by Leslie Adler)