Cautious stance: Soybeans are loaded on a truck during harvest at a farm in Luziania in Brazil. CBOT soybean meal is also off to a rough start, losing as much as 6% in the first two weeks of the year, also the sharpest since 2015. — Reuters
SPECULATORS eased concerns over global grain and oilseed inventories late last year, but their selling enthusiasm, especially in Chicago-traded corn, soybeans and soybean meal, has accelerated this month as US government outlooks corroborate the supply comfort.
Most-active Chicago Board of Trade (CBOT) corn futures shed 3.4% in the four-day trading week ended Jan 16, driven by the US Department of Agriculture’s heavy corn supply outlook issued on Jan 12.
The main feature of that report was the record 2023 US corn yield, which was not expected.
In the week ended Jan 16, money managers extended their net short position in CBOT corn futures and options to 260,542 contracts, the largest since June 2020 and the largest ever for the date.
That compares with 230,723 contracts a week prior, and new gross shorts were the driver for a second straight week.
Corn open interest generally increases at the beginning of each year, but it has surged particularly fast this year.
Futures and options open interest jumped 21% in the three weeks ended Jan 16, the biggest rise for any three-week stretch since late May 2019, when funds were covering near-record shorts.
Corn futures fell nearly 8% in the three weeks ended Jan 16, the worst start to a year since 2015.
CBOT soybean meal is also off to a rough start, losing as much as 6% in the first two weeks of the year, also the sharpest since 2015.
Soybean meal open interest rose nearly 12% in the two weeks through Jan 16, slightly larger than a comparable October 2023 run and the largest two-week gain since early February 2022. Meal futures and options open interest is easily record high for the date but well off the November peak.
Meal futures finished the week ended Jan 16 up 1%, but active selling the previous Friday pushed speculators into their first net short since November 2021. The managed money net meal short as of Jan 16 stood at 4,079 futures and options contracts versus a net long of 10,461 in the prior week.
The speed at which money managers discarded what in late November had been near-record bullish meal bets is astounding.
Net selling in the seven weeks ended Jan 16 totalled about 140,000 futures and options contracts, equivalent to about 14 million short tonnes.
For context, US meal production and exports in 2022 to 2023 were 52.5 million and 14.7 million short tonnes, respectively.
Since late 2020, funds have been hesitant to place short bets on CBOT soybeans, but they nearly doubled gross short positions in the three weeks ended Jan 16, most heavily in the latest week.
Open interest jumped 16% in that period, the most for any three weeks since February 2022.
Money managers’ net short in CBOT soybeans surged to 76,797 futures and options contracts as of Jan 16 versus 31,248 a week earlier, and the new stance is the most bearish since February 2020.
Soybean futures have been trading near their lowest levels since late 2021.
Funds have maintained their sizeable net short in CBOT soybean oil since late December, and the Jan 16 position of 47,011 futures and options contracts is just slightly larger than in the prior week.
CBOT wheat fell 4.6% in the week ended Jan 16, and money managers increased their net short to 68,575 futures and options contracts from 57,988 a week earlier.
Moves in most-active CBOT futures between last Wednesday and Friday are as follows: corn up 0.5%, soybeans down 1.1%, wheat up 1.9%, meal down 3.9%, soyoil down 0.7%.
Traders will continue watching South American weather and any demand developments, especially pertaining to China. — Reuters
Karen Braun is a market analyst for Reuters. The views expressed here are the writer’s own.
