Column: Funds packed on more corn but shed soy length ahead of USDA data
FORT COLLINS, Colo. (Reuters) – Chicago corn futures fell ahead of last week’s much anticipated U.S. government reports, but heavily bullish speculators stayed the course, extending their long position on the yellow grain.
In the week ended March 30, money managers increased their net long in CBOT corn futures and options to 395,584 contracts from 388,175 a week earlier, according to data from the U.S. Commodity Futures Trading Commission.
That is funds’ most optimistic corn stance since Feb. 1, 2011, and the move was largely due to the addition of outright longs. But commodity funds were pegged to have sold 49,000 futures contracts during the week due to the unpredictable nature of Wednesday’s USDA reports.
Most-active corn futures fell 2.2% in the week ended March 30, but the U.S. Department of Agriculture the following day shocked the market with much lighter U.S. corn plantings than expected. Corn acres came in at 91.1 million for the 2021 harvest, below the trade range of estimates.
U.S. soybean plantings at 87.6 million acres also came in well below the market expectation of 90 million. But investors had offloaded some of their bullish bean bets just prior.
In the week ended March 30, money managers reduced their net long in CBOT soybean futures and options by nearly 21,000 contracts to 141,880, their least optimistic view since late August. Most-active soybeans were down 4% during the week, and commercial end users were big buyers of the oilseed.
The surprisingly low U.S. acreage intentions sent corn and soybeans 3.8% and 2.6% higher, respectively, over the last two sessions. The markets were closed Friday for the Good Friday and Easter holidays.
The prospects for smaller-than-expected U.S. harvests sent the new-crop contracts on an even bigger surge Wednesday and Thursday. December corn rose 7.1% and November soybeans jumped 6.5%. Both nearby and new-crop corn and soy contracts rose the daily limits on Wednesday.
SOYBEAN PRODUCTS AND WHEAT
In the week ended March 30, money managers added just 615 soybean meal futures and options contracts to their net long, resulting in a position of 58,235 contracts. But they were sellers of soybean oil for a fifth consecutive week, with their net long as of March 30 dropping to 80,840 futures and options contracts from 93,977 a week earlier.
Most-active soybean oil futures had dropped nearly 12% during that period on a retreat from more than eight-year highs, though soybean meal by comparison was nearly unchanged. Both contracts rose about 3% over the last two sessions.
Chicago wheat futures have traded well off their highs set in January, and money managers have established a bearish CBOT wheat view for the first time since December. Funds’ net short in CBOT wheat was 14,711 futures and options contracts as of March 30 versus a net long of 8,160 a week earlier.
That is funds’ most pessimistic Chicago wheat position since August. Most-active futures had fallen more than 5% in the week through March 30, though they ended 1.5% higher over the next two sessions based on strength in corn and soybeans.
Money managers maintained their bullish views in Kansas City wheat futures and options through March 30, though their net long of 21,722 contracts is the smallest since September. That compares with 26,242 contracts a week earlier.
Funds also remain optimistic toward Minneapolis traded wheat, but they reduced their net long to 10,384 futures and options contracts through March 30 from 15,224 in the prior week. That marked their largest weekly selloff in spring wheat in exactly a year.
The opinions expressed here are those of the author, a market analyst for Reuters.
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