- Reuters
SPECULATORS this month established their first bullish Chicago corn stance in over a year, and those views held last week despite weakness across US grain and oilseed markets.
The Chicago Board of Trade (CBOT) corn futures fell fractionally in the week ended Nov 19, though money managers increased their net long to 114,628 futures and options contracts from 109,989 a week earlier to fortify their most bullish corn position since February 2023.
However, it was not exactly a vote of confidence as the move consisted of both longs and shorts exiting the market, and it was the first time in five weeks that funds reduced gross corn longs.
US corn demand remains relatively strong, but traders have been weighing improved weather outlooks for South America and a potentially larger 2025 harvest for rival corn exporter Ukraine.
Corn futures drifted slightly lower between last Wednesday and Friday, but CBOT soybeans slid 1.5%, reaching one-month lows last Friday.
Beans had eased more than 1% in the week ended Nov 19, and money managers increased their net short to 67,701 soybean futures and options contracts from 54,536 in the prior week, driven by an influx of gross short positions.
The world is awash with soybeans and top buyer China has not been as active as some analysts expected, particularly in the United States market.
Top exporter Brazil is on track for a bumper harvest, keeping pressure on the soybean complex. Money managers have been heavy net sellers of CBOT soybean meal in the latest four weeks.
Through Nov 19, they more than doubled their net short to 63,700 futures and options contracts from 27,631 in the week before.
That marks funds’ most bearish meal view since late February 2020, which also contains their record net short of 77,112 contracts. However, their gross meal shorts were the most plentiful on record as of last week.
From a technical standpoint, CBOT soymeal has been trading at or near oversold levels for almost a month.
In the last couple weeks, meal has held below US$300 per short tonne, the first such instance since mid-2020.
January CBOT soybean oil plunged nearly 7% between last Wednesday and Friday as the global vegoil rally cooled.
Benchmark Malaysian palm oil futures last week posted their worst weekly losses in 19 months after having surged to two-and-a-half-year highs.
CBOT soyoil had already lost 3% in the week ended Nov 19, and money managers cut their net long by about 19,000 contracts to 56,060 futures and options contracts.
Cheap Russian supplies continue to weigh down global wheat prices, and abundant rains in the United States.
Plains have led to an unprecedented improvement in US winter wheat conditions over the last few weeks.
Money managers through Nov 19 pushed their net short in CBOT wheat futures and options to a 12-week high of 51,546 contracts from 45,307 a week earlier.
Funds had been doubly as bearish on this date a year ago. CBOT trading volumes could thin out later this week as US markets are closed on Thursday for the Thanksgiving holiday. Market watchers will continue to monitor crop progress in South America as well as geopolitical developments, including cooperation between Brazil and China and tensions in the Black Sea. — Reuters
Karen Braun is a market analyst for Reuters. The view expressed here are the writer’s own.
