Money managers reversed their six-week selling streak across Chicago-traded grains and oilseeds in the week ended September 12 even amid some relatively bearish figures from the US Department of Agriculture. The CBOT oilshare long position also reached an all-time high last week as funds again boosted their already massive bullish stance on CBOT soyabean oil.
Despite further indication that the US corn and soyabean harvests may be larger than originally anticipated, money managers significantly slowed their selling of corn futures and options and were even net buyers of soyabeans. Benchmark CBOT contracts December corn and November soyabeans tumbled last Tuesday as USDA raised US yield outlooks for the second month in a row, against the prediction of market analysts.
Technical buying, strong sales of US product, and strength in soyameal lifted November soyabeans to a one-month high by Thursday's close. But futures fell on Friday with profit-taking in control despite fresh export demand and news that US soyabean processors likely crushed a record volume of soyabeans in August.
With a larger US corn harvest prediction, USDA raised domestic and global corn carryout for 2017/18, offsetting the hefty 70 million bushel bump in old-crop US exports. Price action in corn futures was fairly muted late last week as traders now await US harvest results to confirm USDA's numbers.
USDA trimmed world wheat ending stocks for both the 2016/17 and 2017/18 marketing years, and wheat crops in Argentina and Australia have recently dealt with adverse weather. This had traders covering shorts in CBOT wheat futures late last week, boosting the benchmark December contract by 2 percent on the week.
Since Wednesday, trade sources suggest that commodity funds have been net buyers across all CBOT futures contracts except for soyabean oil. The CBOT oilshare value dropped 3 percent over the last three sessions with soyameal finding strength and specs unable to further defend their huge soyaoil long. This marks the largest three-day decline in oilshare value since early July, and last week's new record long position may be safe in the near term.
Last week's halt in bearish momentum from the funds could prove temporary as US farmers are beginning to harvest their corn and soyabeans in earnest, and early anecdotal reports suggest some are finding better-than-expected yields at least partially stemming from the favorably cool August. But speculators might avoid reading too deeply into the harvest results this early as only 5 percent of US corn was harvested as of September 10, and the bulk of the country's corn and soyabeans are harvested in October.
In the week ended September 12, money managers cut their net short position in CBOT soyabeans to 4,408 futures and options contracts from 11,944 in the week prior, according to data from the US Commodity Futures Trading Commission. This was perhaps the most surprising move of the week as the November contract lost 16.5 cents, or 2 percent, during the period. The position adjustment consisted of both short-covering and new longs in the market. Funds expanded bullish bets in CBOT soyabean oil to 100,435 futures and options contracts from 88,634 in the week before. This is the first time in nine months and only the 10th week on record that the spec soyaoil long has exceeded 100,000 contracts.
At the same time, funds modestly retracted bearish bets in CBOT soyabean meal to 31,817 futures and options contracts from 36,344 in the previous week, and this sent the spec oilshare long position to a record-large 132,252 contracts. The week ended September 12 marked the seventh consecutive week in which speculators reduced optimism in CBOT corn in favor of a bearish stance, but the most recent weekly move was by far the smallest of the seven. (http://reut.rs/2x2AUZS)
Funds lengthened their net corn short to 119,412 futures and options contracts from 109,723 in the week prior, marking the most bearish spec position on the yellow grain since the first week of June. In Chicago wheat, money managers snapped an eight-week streak of downward momentum as they trimmed their net short to 83,745 futures and options contracts from 86,570 in the previous week. Funds hold the second most bearish stance on soft red winter wheat for the month behind 2016. (http://reut.rs/2jvfTl0)
Reductions in spec optimism toward K.C. and Minneapolis wheat were very slight last week. In K.C. wheat, funds shaved their net long to 13,031 futures and options contracts from 14,985 in the week before. In Minneapolis wheat, the spec long dropped to 7,005 futures and options contracts from 7,442 in the week prior.
Comments
Comments are closed.