FILE PHOTO: Soybeans are transferred to a grain elevator on Nancy Kavazanjian and Charlie Hammer's farm in Beaver Dam, Wisconsin, U.S., October 1, 2024. REUTERS/Renee Hickman/File Photo
BOTH soybean and soybean meal supplies have remained ample globally for much of 2024, and speculators are nearing year’s end with a new record short position in Chicago-traded soybean meal.
In the week ended Dec 17, money managers increased their net short position in Chicago Board of Trade (Cbot) soybean meal futures and options to a record 88,971 contracts, up more than 16,000 on the week. That beats the old record of 77,112 contracts from February 2020.
Open interest in soybean meal futures and options hit a record high last month and the latest tally is near those levels.
The market has been watching record US soybean crushing rates as well as strong output in South America, creating ample meal stocks.
Most-active Cbot meal futures last Tuesday dipped to US$284.20 per short ton, the contract’s lowest since June 2020. Meal traded much of last week at the lowest mid-December levels in nine years before surging nearly 4% last Friday.
However, last Friday’s settle of US$302.20 is 22% lower than on the same date last year.
Cbot soybean futures weakened further in the week ended Dec 17, and money managers extended their net short to 76,252 futures and options contracts from 58,320 a week earlier.
That marks funds’ most bearish mid-December soybean view in five years, reflecting expectations that global supplies will remain plentiful in the months to come. China placed a big order for US soybeans last week, but its recent participation in the US market has otherwise been lacklustre.
Cbot March soybeans last Thursday notched a contract low of US$9.47 per bushel. Soybean futures as last Friday were at five-year lows for the date and down 26% from a year ago.
Soybean oil
As of Dec 17, money managers cut their net long in Cbot soybean oil futures and options by nearly 15,000 contracts on the week to just 2,639.
Funds were bearish last December but bullish in the previous four, so the neutral stance is a bit unusual.
The market is perhaps awaiting direction on the future of US biofuel policy when the new administration is installed next month. However, futures were weak late last week as the March contract hit a three-month low last Thursday of 39.61 US cents per pound.
Cbot soyoil last Friday settled at four-year lows for the date, down 21% from a year ago.
Corn
Money managers through Dec 17 trimmed their net long in Cbot corn futures and options to 159,415 contracts from 165,890 a week earlier, which had been a near-two-year high.
However, the new stance is funds’ most bullish for the date in three years.
Cbot March corn was up fractionally over the last three sessions, though on a most-active basis, last Friday’s settle of US$4.46-1/4 per bushel was the date’s lowest in four years. That is down 5% from a year ago.
US and global corn supplies are significantly less burdensome than expected earlier this year due to strong crops plus strong demand.
However, US farmers could crank up corn plantings in 2025, especially if soybean prices remain relatively unattractive.
Wheat
Cbot wheat futures fell 3% in the week ended Dec 17, and money managers boosted their net short to an eight-month high of 87,401 contracts from 66,779 a week earlier. That marked funds’ largest round of weekly net selling since March 2021.
Funds’ latest Cbot wheat position is their most bearish for the time of year since 2017. Fittingly, March wheat last Friday fell to a contract low of US$5.29-1/4 per bushel.
As of Friday, Cbot wheat futures were the date’s lowest in six years and down 13% from the same date last year.
Despite relatively tight stocks among major exporters, traders appear comfortable that global needs can be met. — Reuters
Karen Braun is a market analyst for Reuters. The views expressed here are the writer’s own.
