Funds rejuvenate CBOT corn, soy bearishness after short covering streak -Braun
The opinions expressed here are those of the author, a market analyst for Reuters.
By Karen Braun
NAPERVILLE, Illinois, Oct 20 (Reuters) -Each week since late August, speculators covered short positions across U.S. grains and oilseeds as weather and geopolitical risks increased supply uncertainties worldwide.
But funds snapped that stretch of short covering in the week ended Oct. 15, adding new gross short positions in CBOT corn, soybean meal and soybeans. That flipped overall grain and oilseed sentiment back to bearish after the establishment of a net long in the prior week, the first in 13 months.
Price action was heavy across CBOT markets in the week ended Oct. 15. Corn led losses with the most-active contract Cv1 down 4.6%. Soymeal SMv1 declined 3.5%, soybeans Sv1 and wheat Wv1 eased about 2.5% each, and soyoil BOv1 slid 1.5%.
During that week, money managers increased their net short position in CBOT corn futures and options to 86,988 contracts from 23,729 in the previous week, which had been funds’ least bearish corn stance since early August 2023.
That move included more than 57,000 new gross short positions, the most for any week since June.
Money managers also added nearly 25,000 gross short positions in CBOT soybean meal, a weekly record in data back to 2006. But this accounted for just 60% of the net selling through Oct. 15 as funds aggressively pitched longs, too.
That slashed the managed money net meal long to 55,711 futures and options contracts versus 96,588 a week earlier, marking near-record net selling.
The week ended Oct. 15 broke money managers’ seven-week streak of net buying in CBOT soybean futures and options, as they expanded their net short to 40,341 contracts from 21,798 in the prior week.
This was primarily due to new shorts, but funds added a handful of gross soybean longs for a fifth straight week. They continued to cover shorts in CBOT soybean oil, but exiting longs trimmed the managed money net long in soyoil by about 5,600 on the week to 26,938 futures and options contracts.
Despite the price slide, money managers trimmed their net short in CBOT wheat futures and options to 26,013 contracts, down nearly 3,500 on the week. That is among funds’ least bearish wheat views within the last two years.
However, CBOT wheat futures plunged nearly 3% on Friday to four-week lows with better weather forecasts for parched wheat regions including top exporter, Russia.
Russia further headlined wheat news on Friday amid plans for grain exporters to sell directly to sovereign buyers, which could be damaging for international trading houses. Moscow is also seeking more control over global food prices by setting up a grain exchange with BRICS countries.
This increases uncertainty for rival suppliers, including the United States, which has seen respectable grain and oilseed export demand as of late, particularly for corn.
In addition to monitoring demand, market participants this week will be paying attention to the ongoing U.S. corn and soybean harvest as well as the soybean planting pace in Brazil, which has recently been slower than normal due to dryness.
Karen Braun is a market analyst for Reuters. Views expressed above are her own.
Graphic- Managed money net position in CBOT corn futures and options https://tmsnrt.rs/3UdYY5s
Graphic- Managed money net position in CBOT soybean meal futures and options https://tmsnrt.rs/40brJ6O
Editing by Leslie Adler
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