Uncertain weather: A farmer prepares to chop up corn stalks in Tiffin, Iowa. Forecasts as of last Friday showed scattered rain possibilities for parts of the US Corn Belt this week, though the moisture will come too late for some fields. — AFP
THE second half of August was exceptionally dry in the US Corn Belt, likely trimming yields for corn and especially soybeans due to their reliance on late-season moisture.
Speculators responded by boosting their bullish Chicago soybean bets, which they have held for more than three years, and easing bearishness in corn futures.
In the week ended Aug 29, money managers cut their net short position in the Chicago Board of Trade (CBOT) corn futures and options to 87,348 contracts from 106,135 in the week before, which had been their most bearish corn view since early May.
Funds added gross corn longs for the first time in four weeks and covered shorts for the first time in five weeks. Most-active CBOT corn futures rose 1.5% during the period but stayed below US$5 per bushel throughout.
CBOT soybeans jumped 3.5% in the week ended Aug 29, touching a one-month high last Monday of US$14.09-1/2 per bushel, some 10% above the August low. The most-active November contract last week traded at 2.8 times the price of December corn, the highest bean-corn ratio since 2016.
Soybean futures’ relative strength versus corn is reflected in funds’ positioning. Money managers through Aug 29 added nearly 33,000 soy contracts to their net long, which reached 90,985 futures and options contracts. That was their biggest net buying week since mid-June.
Last week’s rise in oilseed optimism extended to the soy products, as CBOT soybean meal futures increased more than 4% and soybean oil added 2.5%. Money managers increased their soymeal net long to 73,753 futures and options contracts versus 52,820 in the prior week.
That was funds’ biggest meal buying week since December, and the new position is their second most bullish for the week in data back to 2006, trailing only last year. However, short covering slightly outweighed the addition of new longs.
Money managers increased their net long in CBOT soybean oil to an eight-month high of 58,317 futures and options contracts as of Aug 29, up from 55,077 in the week before.
Most-active soyoil futures have traded above 60 US cents per pound since mid-August, their longest 60-plus streak since January.
Most-active CBOT wheat futures lost more than 4% in the week ended Aug 29. Money managers were net sellers of CBOT wheat futures and options for a fifth consecutive week, expanding their net short to a 10-week high of 79,881 contracts from 70,921 a week earlier.
CBOT wheat declined another 1% over the last three sessions, ending at US$5.95-1/2 per bushel last Friday, wheat’s lowest close since May 31.
Most-active futures have not consistently traded that low since late 2020, despite no resolution to the Black Sea grain deal that Russia quit in July. Turkiye and Russia will hold talks over whether to revive the agreement.
Corn futures dropped 1.1% over the last three sessions, soybeans lost 1.7%, soymeal lost 3% and soy oil was mostly unchanged.
Forecasts as of last Friday showed scattered rain possibilities for parts of the US Corn Belt this week, though the moisture will come too late for some fields.
The US Department of Agriculture has announced a daily export sale of US soybeans for six consecutive trading days, though Brazilian supplies will continue threatening US shipments.
Brazil last week authorised farmers in the country’s largest producing state of Mato Grosso to plant soybeans earlier than the usual Sept 15 start. — Reuters
Karen Braun is a market analyst for Reuters. The views expressed are the writer’s own.
