IN the final week of September, speculators staged a hefty round of short covering in Chicago-traded corn and in the soybean complex, potentially reducing risk ahead of an often-unpredictable US government report.
CBOT corn, soybean and soybean product futures have all worked their way off recent multi-year lows, as demand recovery has also coincided with some drought-related crop concerns in major suppliers.
In the week ended Oct 1, money managers halved their net short position in CBOT corn futures and options to 67,699 contracts, their least bearish view since early August 2023.
The associated short covering was the largest for any week in nearly five months.
Most-active CBOT corn rose 4.2% in the week, which included the release of the US Department of Agriculture’s quarterly grain stocks on Sept 27. That report showed lighter-than-expected US corn supplies as of Sept 1, and strength in both wheat and soybeans also lifted corn futures during the period.Money managers slashed bearish views in CBOT soybean futures and options with a sixth consecutive week of short covering, although new long positions accounted for 40% of the move.
That dropped their net short to an 18-week low of 34,886 contracts, down more than 40,000 on the week.
Most-active CBOT soybeans were up more than 1%, though CBOT soybean meal surged nearly 7% while soybean oil eased 1%.Money managers boosted their net long in CBOT soybean meal futures and options to 103,209 contracts, record-high for the date.
That reflected an increase of nearly 45,000 contracts, the most for any week since March 2020.
Although funds covered an abnormally large number of short meal positions, new longs accounted for 60% of the latest move.
More than 27,000 gross meal longs were added, a weekly record in data back to 2006.
Despite the week’s price slide, money managers heavily covered short positions in CBOT soybean oil for a second week, flipping to a net long for the first time in six months. — Reuters
Karen Braun is a market analyst for Reuters. The views expressed here are the writer’s own.
