Funds’ ideas on CBOT corn diverge amid futures rally -Braun
The opinions expressed here are those of the author, a market analyst for Reuters.
By Karen Braun
NAPERVILLE, Illinois, Oct 27 (Reuters) -Speculators recently pared their bearish Chicago corn bets to the lowest levels in over a year as supply uncertainties ramped up across global grain and oilseed markets.
Some of those concerns, such as dryness in South America, have waned for now, though other factors like strong U.S. demand and geopolitical worries may have recently limited price losses.
In the week ended Oct. 22, money managers trimmed their net short position in CBOT corn futures and options to 71,499 contracts from 86,988 a week earlier. That is slightly less bearish than their year-ago net short near 100,000 contracts.
However, funds’ moves in the latest week somewhat clashed, suggesting a lack of consensus over corn market direction. Money managers through Oct. 22 added more than 38,000 gross long positions, the most for any week in almost two years.
But they also packed on almost 23,000 gross shorts during the week, which featured gains of near 4% in CBOT corn futures Cv1. A similar degree of losses had been observed in the prior week, when funds were heavily increasing gross shorts.
New short bets dominated in CBOT soybeans for a second consecutive week, and money managers through Oct. 22 raised their net short to 59,574 futures and options contracts from 40,341 a week earlier. They had been near flat in this week a year ago.
Most-active CBOT soybeans Sv1 were unchanged during the week, but soymeal SMv1 and soyoil BOv1 rose 2% and 3%, respectively. Money managers expanded their net long in soybean meal futures and options to 56,448 contracts, up 737 on the week.
Their net long in CBOT soybean oil futures and options reached the highest level in just over a year, rising to 40,649 contracts from 26,938 a week earlier. Money managers in soyoil have both added longs and covered shorts in recent weeks, though much more prominently on the latter.
Over the last couple months, funds have not materially changed their views on CBOT wheat futures and options, which hover near the least bearish levels in two years. Their net short stood at 28,915 contracts as of Oct. 22, up nearly 3,000 on the week.
LOOKING AHEAD
CBOT wheat futures Wv1 eased fractionally in the week ended Oct. 22 but then slid even further late last week, falling 2% on Friday alone. Wetter forecasts for the dry U.S. Plains stood to boost winter wheat prospects, and parts of top exporter Russia have recently received much-needed rain.
Russia earlier this month proposed plans for an international grains exchange among BRICS members to gain more control over global prices, but late last week it was revealed the efforts could take years to get started.
CBOT corn and soybeans drifted slightly lower in the last three sessions while meal plunged almost 4%, hitting two-month lows on Friday.
But CBOT soybean oil notched gains between Wednesday and Friday, lifted by strength in global vegoils. Malaysian palm oil futures FCPOc3 last week hit their highest levels in more than two years on production declines and policy moves in the top two producers.
Traders this week will be monitoring U.S. export demand, especially for corn, which recently recorded the best weekly sales volume since early 2021. Both commodity and equity markets could be impacted by jitters ahead of the U.S. Presidential election on Nov. 5.
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/4eY426m
Graphic- Managed money net position in Chicago wheat futures and options https://tmsnrt.rs/3C0Bvi1
Editing by Diane Craft
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