Column-Funds shunned CBOT corn last week but were light buyers of soy -Braun

FORT COLLINS, Colo. (Reuters) – Chicago-traded grain and oilseed futures continued rising last week, and while speculators were buyers of soybeans, soy products and wheat during the period, they trimmed bullishness in corn for the third consecutive week.

CBOT corn futures rose more than 1% in the week ended Dec. 15, but money managers reduced their net long position to 250,260 futures and options contracts from 269,583 a week earlier, according to data from the U.S. Commodity Futures Trading Commission.

Both commercial users and other reportable traders bought corn during that period, but trade estimates predicted commodity funds had bought 15,000 corn futures. At 30,000 contracts, those estimates were also overly aggressive for soybeans, which rallied more than 3% during that week.

But through Dec. 15, money managers extended their net long in CBOT soybean futures and options by less than 5,000 contracts to 190,218 contracts. That followed four consecutive weeks of net selling, although futures rose 3% over that stretch.

Most-active corn and soybean futures both rose 3% over the last three sessions, and the trade estimates peg fund buying at a hefty 55,000 corn futures and 32,500 soybean futures.

Soybean futures on Friday topped out at $12.24-3/4 per bushel, the highest for the most-active contract since June 2014. Corn futures failed to break through their recent high from Nov. 30, but Friday’s settle of $4.37-1/2 was the highest in the most-active month since July 17, 2019.

Corn and soybeans continued their historic rallies late last week due to strong demand coupled with tightening supply outlooks, especially for soybeans. Many South American crop regions have received much-needed rains, but more is still required, and the slimmer stocks seem to have made traders extra sensitive to any possible weather anomaly.

Markets have also found support over disruptions to grain exports and soymeal production in Argentina, the top exporter of soy products. As of Friday, workers had been striking for more than a week due to unsuccessful wage negotiations.

Most-active soybean futures have rallied 15% since Nov. 1, comparable with only 2007 and 1987 within the last few decades. Soybeans have jumped 38% since the U.S. Department of Agriculture’s August crop report, the likes of which have not been seen since 2003, when futures rallied 39%.

Most-active corn futures have risen nearly 10% since Nov. 1, comparable with the same period in 2014, though they have rallied 33.5% since the August USDA report. Both 2006 and 2010 featured bigger percentage gains from August to December.

SOY PRODUCTS AND WHEAT

In the week ended Dec. 15, money managers extended their net long in CBOT soybean oil futures and options to 97,719 contracts from 89,063 a week prior. The new stance is nearly identical to those from the same weeks in 2019 and 2016.

During the same period, money managers lifted their net long in soybean meal to 77,207 futures and options contracts from 62,642 a week earlier.

Strength in global vegetable oil markets and the conflict in Argentina both supported soy products last week, and commodity funds are presumed to have added to their bullish bets. Soybean meal futures on Friday hit $408 per short ton, the most-active contract’s highest since June 17, 2016.

Soybean oil futures rose above 40 cents per pound for the first time since June 30, 2014, and they also settled above that mark.

Most-active Chicago wheat futures rose more than 5% in the week ended Dec. 15, and money managers flipped to a net long of 6,672 futures and options contracts from their net short of 5,692 a week earlier. However, trade estimates had pegged the buying at 28,000 futures contracts.

Futures jumped another 1.4% between Wednesday and Friday, but the buying is expected to have been light. Russian exports remained in focus late in the week, as the country plans to impose an export tax on Feb. 15 in order to stabilize domestic prices.

That initially sparked concern that Russian exporters would accelerate shipments in the run up to Feb. 15, but grain traders said Thursday that they are experiencing delays in obtaining export documents from Russia’s customs service.

Through Dec. 15, money managers increased their net long in Kansas City wheat futures and options by nearly 8,000 contracts to 52,613 contracts, unusually bullish for the time of year. Since July 1, funds have been net sellers of K.C. wheat in only five of the 24 weeks.

Funds were net buyers of Minneapolis wheat futures and options for the first time in seven weeks, raising their net long to 3,389 contracts through Dec. 15 from 2,538 a week earlier.

The opinions expressed here are those of the author, a market analyst for Reuters.

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