Funds tweak bearish corn, soy bets after strong US crop forecast -Braun
The opinions expressed here are those of the author, a market analyst for Reuters.
By Karen Braun
NAPERVILLE, Illinois, Aug 18 (Reuters) -Speculators were positioned favorably last week in Chicago grains and oilseeds amid bumper U.S. crop projections, and they bolstered their bearish views just before prices tumbled yet again to the lowest levels since 2020.
In the week ended Aug. 13, money managers increased their net short in CBOT corn futures and options to 249,007 contracts from 242,545 a week earlier, snapping a four-week streak of short covering.
That is funds’ most bearish mid-August corn stance, though it is off significantly from their all-time short of 353,983 contracts set on July 9.
Additionally, more than 13,000 gross corn longs were added in the latest week, the most since May, possibly signaling that some investors believe futures could be near short-term lows.
Money managers also added gross soybean longs in the week ended Aug. 13, but new shorts were more prominent, pushing funds’ net short in CBOT soybeans to 174,447 futures and options contracts from 169,016 in the prior week.
Unlike in corn, that is close to funds’ record soy short from July 16 of 185,750 contracts, as beans did not experience any prolonged short covering in recent weeks.
That checks out from a fundamental perspective because on Aug. 12, the U.S. Department of Agriculture’s estimate of domestic soybean ending stocks for 2024-25 jumped 29% from the July forecast to 560 million bushels, the third highest on record.
A large boost in soy acres plus a record yield lifted the U.S. crop projection past all analyst predictions.
But U.S. corn ending stocks fell 1% from last month’s peg, as the balance sheet was able to absorb a huge yield of 183.1 bushels per acre through a reduction in acres and a bump in demand. The 2024-25 U.S. corn carryout would still be a six-year high.
Most-active CBOT corn Cv1 and soybeans Sv1 in the week ended Aug. 13 fell 2% and 6.3%, respectively, and eased another 1.2% and 0.6% in the following three sessions.
The period included new contract lows on Friday, with December corn dipping to $3.90 per bushel and November soybeans to $9.55, both close to four-year lows for the most-active contracts.
SOY PRODUCTS AND WHEAT
December CBOT soybean meal SMZ24 plunged 8.4% in the week ended Aug. 13. That was tied to a record weekly selloff from money managers, who slashed their net long to 779 contracts from 42,009 a week earlier.
A pile-up in soybeans and soymeal in top consumer China has instilled demand doubts regarding its feed sector, weighing on global grain and oilseed prices for months now.
Money managers have a comparably more pessimistic view on CBOT soybean oil, having expanded their net short by about 1,000 contracts to 80,273 futures and options contracts through Aug. 13. That is funds’ second most bearish mid-August soyoil view after 2018.
December soybean oil BOZ24 was down more than 2% in that week and fell another 1% in the last three sessions, hitting a contract low of 37.66 cents per pound on Friday.
December meal notched a contract low on Wednesday of $298.50 per short ton, and last week’s meal and oil bottoms were both the lowest since late 2020 on a most-active basis.
CBOT wheat Wv1 last set contract lows in late July, but tumbled nearly 3% through Aug. 13. The managed money net short grew by about 2,000 to 73,288 futures and options contracts, largely unchanged since late June.
USDA last week pegged U.S. wheat production below trade expectations, though U.S. ending stocks are seen rising to four-year highs in 2024-25.
However, stocks among major wheat exporters remain relatively low, potentially limiting downside in global wheat prices.
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/4fRlEBR
Graphic- Managed money net position in CBOT soybean meal futures and options https://tmsnrt.rs/46X8Y8s
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