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Funds scaled back on CBOT grain risk ahead of volatile USDA data -Braun

Speculators’ bullish views toward Chicago-traded grains and oilseeds have recently hovered near all-time records, though the looming reports from the U.S. government sent some investors to the exits last week.

Those March 31 Department of Agriculture reports, including U.S. planted acres and stocks, are notoriously hard to predict and often cause large swings in futures prices. The plantings report lived up to that hype this year, though the impact on corn was opposite that on soybeans.

In the days leading up, investors reduced their net longs primarily by reducing their outright long positions, mostly in corn, soybeans and soy products. Open interest also declined on the week across the board with losses of 3% in soybeans, 4% in corn and 9% in wheat.

Futures came under pressure in the week ended March 29, with losses ranging from 2.3% in most-active CBOT soybean meal futures to 9.3% in CBOT wheat. Corn, soybeans and soybean oil each lost between 3% and 4%, notching one of their worst weeks within the last few months.

In the week ended March 29, money managers cut their net long in CBOT corn futures and options to 354,604 contracts, a reduction of nearly 30,000 on the week, according to data from the U.S. Commodity Futures Trading Commission.

Commercial end users cut their gross corn shorts by nearly 46,000 contracts, the most since November, and index traders reduced their total number of corn contracts by 3%. Other reportable speculators sold their largest volume of corn since early January.

Money managers shed nearly 18,000 CBOT soybean futures and options contracts through March 29, resulting in a net long of 156,273 contracts, the least bullish in eight weeks. Index traders reduced soybean positions by 3% during the week, but cut CBOT wheat positions by 10%.

Analysts thought funds had likely sold a significant portion of their CBOT wheat long during the week given the price plunge, but the managed money view as of March 29 was nearly unchanged from the prior week at 19,439 futures and options contracts.

Money managers trimmed their Kansas City wheat net long by less than 500, to 45,310 futures and options contracts, and they cut just over 200 contracts from their Minneapolis wheat net long, which fell to 14,005.

In the soybean products, money managers reduced their net long in CBOT soybean oil futures and options through March 29 to 78,601 contracts from 84,078 a week earlier. Their net long in CBOT soybean meal fell by around 1,200 contracts to 99,948.

CORN BUYING, BEAN SELLING
On Wednesday, USDA’s March planting survey showed 2022 U.S. corn plantings would be 2.5 million acres below what analysts expected, and soybean acres came in 2.2 million acres above. That likely reversed investors’ corn selling in the last three sessions but extended it for soybeans.

Most-active corn futures rose 1.2% between Wednesday and Friday, but the new-crop December contract jumped 5.4% since the low U.S. acres are associated with the upcoming marketing year. December corn notched a contract high of $6.93-3/4 per bushel Friday, which is also record high for the time of year.

Prospects for record U.S. soybean plantings, more than 4% above last year, did not bode well for soybean bulls late last week. Most-active futures shed nearly 4% in the last three sessions and new-crop November futures lost 3%, on Friday dropping below $14 per bushel for the first time since Feb. 4.

Trade sources peg commodity funds as having bought 21,500 CBOT corn futures in the last three session, though soybean selling was estimated at 28,000 futures contracts.

U.S. wheat plantings and March 1 stocks came in below trade expectations on Wednesday, but wheat was likely caught up in the week’s broad commodities selloff. Most-active CBOT wheat futures lost 3% over the last three sessions, on Friday closing below $10 per bushel for the first time in a month.

Market participants are looking ahead to the USDA’s next monthly supply and demand report on Friday. That will incorporate the U.S. stocks data from last week but not the acreage data as 2022-23 outlooks will first be published in May.
Source: Reuters (Editing by Leslie Adler)

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