Funds’ grain and oilseed optimism sinks below year-ago levels
Speculators have been bullish toward Chicago-traded grains and oilseeds since August 2020, but they are now less optimistic than a year ago, which marked the early stages of the recent rally.
Commodity funds still hold a more optimistic corn view than a year ago, but their soybean stance is distinctly lighter. Peak bullishness was maintained across grains and oilseeds from late December through February, though funds’ optimism is now less than half those levels.
In the week ended Sept. 21, money managers added just over 2,000 futures and options contracts to their CBOT corn position resulting in a net long of 214,350 contracts, according to data from the U.S. Commodity Futures Trading Commission.
That compares with a net long of 95,912 contracts in the same week a year ago, and that grew past 200,000 contracts by mid-October. Most-active corn futures Cv1 ended at $5.26-3/4 per bushel on Friday versus $3.65-1/4 a year ago.
Through Sept. 21, money managers eased their net long in CBOT soybean futures and options to 49,701 contracts from 55,380 a week earlier, and the new stance is funds’ least optimistic since early August 2020.
A year ago, money managers held a net long in soybeans of 211,143 futures and options contracts, and two weeks later that position reached its recent max of 238,394 contracts. Most-active soybean futures Sv1 settled at $12.85 per bushel Friday versus $10.02-1/2 a year ago.
Index traders held a record number of corn and soybean positions from the end of 2020 through mid-2021. Their corn positions have returned to the year-ago levels though they are lighter today for soybeans.
December corn futures CZ1 reached a five-month low on Sept. 10, leaving the market wondering whether prices will move even lower before expiration. Much of that depends on the ongoing U.S. harvest results and data from the U.S. Department of Agriculture on Thursday.
Corn on Friday ended nearly 6% above the recent low, but USDA’s upcoming reports leave futures open to volatility. Thursday’s reports will include quarterly grain stocks, which are effectively the ending stocks for the 2020-21 corn and soybean marketing years.
Analysts see corn stocks at 1.155 billion bushels, slightly below USDA’s Sept. 10 peg of 2020-21 ending stocks at 1.187 billion. The soybean prediction of 174 million bushels is nearly even with USDA’s latest of 175 million.
USDA on Thursday will also issue its final estimate of U.S. wheat production and will revise 2020 corn and soybean production if necessary. Oct. 12 is the next chance for changes to 2021 corn and soybean yields.
SOYBEAN PRODUCTS AND WHEAT
Money managers through Sept. 21 sold soybeans and soybean products for a fifth consecutive week. Their net long in CBOT soybean oil fell about 8,000 contracts to 38,980 futures and options contracts, the least bullish since late July 2020.
Their net short in soybean meal expanded by about 2,200 contracts to 18,553, their most bearish since early August 2020. Soybean meal futures continue trading near one-year lows, but soybean oil prices are about 75% higher than the year-ago levels.
Global vegoil prices, including those for soyoil competitors like palm and sunflower oil, might ease in the next six months to a year as supplies improve, according to a top industry analyst. However, the declines are unlikely to be sharp.
Money managers slightly trimmed their net short in CBOT wheat futures and options through Sept. 21 to 5,491 contracts from 6,005 a week earlier. A year ago, funds held a net long of 14,543 contracts, though strong buying late last week may have returned them near that level.
Global wheat prices have risen amid the tightening of exportable global wheat supplies and quality concerns. Those issues have led China to purchase a good deal of Australia’s upcoming harvest despite an ongoing trade dispute.
Most-active CBOT wheat futures Wv1 rose nearly 5% over the last three sessions, ending at $7.23-3/4 per bushel on Friday. Minneapolis futures MWEZ1 rose 3% and Kansas City KWZ1 rose 4%.
Through Sept. 21, money managers added nearly 1,400 contracts to their K.C. wheat net long, lifting it to 39,034 futures and options contracts. They shed 258 contracts from their Minneapolis wheat long, resulting in 12,672 contracts.
Source: Reuters (Reporting by Karen Braun; Editing by Diane Craft)