Funds nearly scrap bullish CBOT soy bets for first time since 2020

Chicago soybean futures have faced significant pressure in recent weeks as U.S. exporters struggle to sell the oilseed during what should be their most opportune window.

Unsurprisingly, investors have about thrown in the towel on bean optimism.

In the week ended Oct. 3, money managers slashed their net long position in CBOT soybean futures and options to 5,001 contracts from 30,058 a week earlier. New shorts and exiting longs both played a role, and money managers have not held a net short in beans since April 2020.

Managed money net position in CBOT soybean futures and options

However, including other reportable traders’ positions puts the total speculative soybean stance at a net short of 2,354 futures and options contracts as of Oct. 3, speculators’ first bearish bean stance since March 17, 2020.

Speculators’ (managed money + other reportables) net position in CBOT soybean futures and options

Most-active CBOT soybean futures shed more than 2% in the week ended Oct. 3, and open interest in futures and options rose 5%, reaching the highest levels since April 2022. Soy futures fell 0.5% in the last three sessions to end on Friday at $12.66 per bushel, their lowest close since June 29.

September U.S. soybean export sales were likely the month’s worst in 12 years as Brazil’s record crop continues to satisfy global needs. Top buyer China has been sluggish with purchasing U.S. beans.

Most-active CBOT soymeal futures lost more than 5% in the week ended Oct. 3. Money managers went on their biggest meal selling spree in five months, reducing their net long to 40,985 futures and options contracts from 59,196 a week earlier, mostly on an increase in gross shorts.

CBOT soybean oil fell 1% through Oct. 3, though several up and down trading days in that period allowed money managers to expand their net long in soyoil futures and options to 41,384 contracts from 35,050 in the prior week.

Soy products also had a rough go late last week as soyoil futures eased 3% in the last three sessions and on Friday hit the lowest levels since June 29. Soymeal was mostly unchanged over that period, but most-active futures on Thursday notched their lowest price since December 2021.

Chicago wheat futures tumbled 3.5% in the week ended Oct. 3, hitting a three-year low during the period. Money managers extended their sizable net short in CBOT wheat futures and options to 98,788 contracts from 96,384 a week earlier. Funds have been bearish CBOT wheat since July 2022.

Similar to soybeans, open interest in CBOT wheat futures and options rose 5% during the week, reaching the highest levels since March 2022. Wheat open interest has risen 42% in the last three month, beginning earlier than the seasonal rise that often happens in October.

Wheat futures were unchanged between Wednesday and Friday as Black Sea tensions flared, increasing uncertainty about exports from that region. CBOT corn futures added about 1% late last week, touching $4.99 per bushel on Friday, their highest since Aug. 29.

Money managers maintain comfortably bearish CBOT corn views, though they trimmed their net short through Oct. 3 by about 9,200 to 159,433 futures and options contracts. Futures gained 1.6% during that week and funds covered short positions.

Managed money outright long positions in CBOT corn futures and options

Grain and oilseed traders this week will be watching for the U.S. Department of Agriculture’s October supply and demand report due on Thursday. The market will also be monitoring the U.S. harvest pace, though USDA’s weekly crop progress will be published on Tuesday since Monday is a U.S. holiday. However, U.S. exchanges will be open as usual on Monday.
Source: Reuters