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
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
