NAPERVILLE, (Illinois): The US government’s June survey delivered shocking corn and soybean acreage figures in the thick of the US summer weather market, though speculators generally reduced risk across Chicago grains and oilseeds last week.
As of July 3, CBOT December corn futures had plunged nearly 22% off their June 21 high as much-needed rain for US crops started falling and also appeared in forecasts. Unexpectedly high corn acreage reported by the US Department of Agriculture on June 30 accelerated the sell-off.
December corn fell 12% in the four-day week ended July 3, and money managers flipped to a net short in CBOT corn futures and options of 18,209 contracts. That compares with a net long of 52,845 contracts a week earlier, and about two-thirds of the move was funds adding new shorts.
US soybean plantings on June 30 came in well below all trade guesses, causing a surge in November soybeans. Beans were up 4.6% in the week ended July 3, though prices were down in the first day and the associated selling offset any fund buying in the following sessions. Money managers reduced their net long in CBOT soybean futures and options to 89,142 contracts through July 3 from 99,480 a week earlier, split between new shorts and the removal of longs. Funds had been pegged as modest net buyers of beans.
November soybeans on July 3 hit their highest levels since February ($13.91-3/4 per bushel) while December corn on July 5 hit its lowest price since 2021 ($4.85-1/2). Corn rose fractionally over the last three sessions, ending Friday at $4.94-1/2 per bushel, just a tick below the June 30 close.
November beans fell 2.7% between Wednesday and Friday as investors took profits ahead of a favourable US weather pattern. As of Sunday afternoon, forecasts were still devoid of any threatening heat in the Corn Belt for at least the next two weeks.
Rainfall looks promising for much of the central Belt, though Minnesota, northern Iowa, Wisconsin and North Dakota could remain drier through mid-month.
This week, traders will be eyeing USDA’s monthly supply and demand report, due Wednesday. Analysts are expecting the agency to make a rare cut to US corn and soybean yields after the unusually dry June. The new US acreage numbers are seen significantly reducing new-crop soybean ending stocks, but higher acres are expected to offset a lower yield on the corn balance sheet.
Money managers slightly extended their net short in CBOT wheat futures and options to 54,006 contracts through July 3 from 52,168 a week earlier. Most-active wheat futures had shed 8.2% that week in sympathy with corn.
CBOT wheat rose more than 1% over the last three sessions on a slower US winter harvest and possible drought concerns for US and Canadian spring wheat. However, open interest in CBOT wheat futures and options is at the lowest mid-year levels since 2005.
USDA on Wednesday will issue its first survey-based outlook for the 2023 US spring wheat crop. The average analyst production guess suggests a slightly below-average spring wheat yield, though the total US wheat crop is seen slightly larger than in June.
CBOT December soybean meal rose nearly 3% in the week ended July 3, but money managers reduced their net long to 52,821 futures and options contracts from 58,980 a week earlier. Funds have been long meal since November 2021.
December soybean oil jumped more than 5% through July 3, and money managers increased their net long to 41,919 futures and options contracts, their most optimistic oil view since mid-January. That compares with 38,751 in the prior week.
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