Funds retain bullish CBOT soy bets and curb bearishness in corn
04.04.2023 (The Star) - SPECULATORS reduced bullish views in Chicago-traded soybeans last week as last month’s sell-off was bottoming.
However, funds still held a moderate net long after that sell-off ended, failing to dump soybeans at anywhere near the rate they had dumped corn last month.
After price-supportive data from the US government last Friday, funds may have returned to the buy side on soybeans and they could be closer to flat in corn, easing up on recently established short positions.
In the week ended March 28, most-active Chicago Board of Trade (CBOT) corn futures rose 2.7% and wheat gained 2.4%, though soybean meal and oil fell 0.6% and 2.1%, respectively.
Soybeans were 0.1% higher, but price action was round-trip as the most-active contract hit five-month lows during the week, shedding as much as 4%.
In the three weeks ended March 28, most-active soybean futures declined 3.2%, but they had been down as much as 7.3% in that timeframe.
New-crop November beans fell as much as 9.2% in the period, including a record 13-session losing streak that ended March 24.
Data published last Friday by the US Commodity Futures Trading Commission showed money managers’ net long position in CBOT soybean futures and options at 99,522 contracts as of March 28, down from 110,786 a week earlier and 157,330 on March 7, roughly when last month’s selling streak began.
Funds’ new soybean stance is moderately bullish in historical context but less so when compared with the same week in the prior two years, when the net longs ranged from 140,000 to 160,000 contracts.
Money managers notched a record three-week net sell-off in CBOT soybean meal futures and options totalling nearly 59,000 contracts, though the resulting net long as of March 28 of 96,129 contracts is still relatively strong.
Lowest levels
The reduction of soymeal gross longs was prominent in all three weeks, and most-active soymeal futures during the latest week reached their lowest levels since early December.
Through March 28, money managers established their most bearish stance in CBOT soybean oil futures and options since September 2019, extending their net short to 12,459 contracts from 5,718 a week earlier.
Funds have been net sellers of CBOT soyoil in 15 of the last 19 weeks.
Money managers cut their net short in CBOT corn futures and options for a second consecutive week through March 28, and short covering dominated the move.
The net short fell to 13,288 contracts from 41,896 a week earlier and 54,134 two weeks earlier, which was funds’ first net short in corn since August 2020.
Money managers mildly extended their net short in CBOT wheat futures and options through March 28 to 89,873 contracts from 86,500 a week earlier despite the rise in most-active futures.
However, futures had been down more than 4% during the period, so the subsequent rally did not attract buyers.
USDA support
The US Department of Agriculture (USDA) last Friday pegged US soybean acres and March 1 stocks below the average trade guess, sending most-active soybean futures to three-week highs. Corn stocks landed below the trade estimate, though corn acres were higher.
However, snowpack in the Northern Plains and potentially cool weather ahead are already causing concern that some acres in those areas may be planted late or not at all.
Both US wheat stocks and acres were larger than expected last Friday, but many of those acres lie in the parched Southern Plains and it is unclear how well those fields will yield or if they can even be harvested at all.
Between Wednesday and Friday, most-active CBOT corn rose 2%, though new-crop December fell 1% on heavier acres.
CBOT wheat dropped 1.1%, and soymeal and soyoil rose 1.8% and 0.8%, respectively. Most-active soybeans were up 2.6% and November added 1.2%. — Reuters
Karen Braun is a market analyst for Reuters. The views expressed here are the writer’s own.