Funds pack on more CBOT beans, meal on Brazil weather and US demand
Speculators ramped up their enthusiasm for Chicago soybeans and soymeal last week as crop concerns for Brazil and a tight U.S. meal market have been raiding the headlines.
In the week ended Nov. 14, money managers extended their net long in CBOT soybean futures and options to an 11-week high of 87,913 contracts from 68,598 a week earlier, predominantly on new gross longs.
Funds added more than 80,000 contracts to their net long in the three weeks ended Nov. 14, their biggest three-week soy buying spree since June. CBOT January soybean futures SF24 rose almost 6% during that period, including 2% in the latest week.
Money managers through Nov. 14 expanded their net long in CBOT soybean meal futures and options to 131,404 contracts from 111,987 a week earlier, also on new longs. That is their most bullish meal view since March and is easily their most bullish for the time of year.
Funds added nearly 100,000 soymeal futures and options contracts to their net long in the five weeks ended Nov. 14, the most for such a period since March 2020. January meal futures SMF24 surged 21% during those five weeks and nearly 4% in the most recent week, reaching their highest ever levels for the date.
Open interest in CBOT soybean meal futures and options reached a record 646,145 contracts as of Nov. 14, up 6% on the week, up 26% in the last five weeks, and 47% higher than the same week a year ago when funds’ meal net long was also seasonally strong.
The pre-2023 record open interest in meal futures and options was 594,016 contracts set in mid-2018 after drought significantly cut down top meal exporter Argentina’s soybean crop.
Argentina’s soy crop losses were considerably worse in 2023, causing a shortage in exportable global soymeal supplies, driving up meal prices and rerouting export demand to the United States.
Hot and dry weather in central Brazil has also supported the soy complex lately, but expected rains over the weekend into this week punctured the rally late last week. On Wednesday, January meal hit contract highs and most-active soybeans reached their highest levels since late August, but beans slid 3.6% over the last three sessions and meal lost 4.2%.
January CBOT soybean oil BOF24 gained nearly 6% in the week ended Nov. 14, though money managers cut their net short by less than 4,000 contracts to 6,597 futures and options contracts. Soyoil dropped more than 1% in the last three sessions.
Most-active CBOT corn futures Cv1 added 2% in the week ended Nov. 14, though they hit three-year lows during the week, reflecting the weight of a record U.S. corn crop on the market.
Money managers cut their net short in CBOT corn futures and options by about 5,100 contracts to 163,486 through Nov. 14, their most bearish stance for the date since 2017.
March CBOT wheat futures WH24 rose fractionally during the week, and funds trimmed nearly 3,000 contracts from their huge net short, resulting in 89,271 futures and options contracts. Money managers have held a net short in CBOT wheat since June 2022.
Money managers have sold Kansas City wheat futures and options in 15 of the last 18 weeks, and as of Nov. 14, their net short reached 37,449 contracts, their most bearish for the date.
That is also among funds’ biggest ever K.C. net shorts, as the only larger ones occurred over 17 non-consecutive weeks in 2019.
Money managers through Nov. 14 cut their net short in Minneapolis wheat futures and options to 27,726 contracts from the previous week’s record net short of 30,998 contracts. Similar to K.C. wheat, funds have been very heavy sellers of spring wheat futures since late July.
CBOT corn lost 2.4% in the last three sessions despite unexpectedly large weekly U.S. export sales, and March wheat fell 3.7%, hitting a seven-week low on Friday. Most-active K.C. wheat KWv1 on Friday hit its lowest levels since July 2021.
Source: Reuters (Editing by Diane Craft)