FORT COLLINS: Speculators have generally been selling Chicago corn since US farmers began planting efforts this spring, but uncertainty over US crop conditions and weather outlooks have recently prevented fund selloffs.
Commodity funds last week had their biggest buying week of 2021 so far when combining CBOT corn, wheat, soybeans and soybean products. US weather forecasts improved late last week and prices weakened, so associated selling may have offset the previous week’s buying. (https://tmsnrt.rs/373Lznn)
CBOT corn futures rose more than 4% in the week ended July 20, and money managers lifted their net long to 223,302 futures and options contracts from 208,799 a week earlier. That is according to data from the US Commodity Futures Trading Commission.
Index traders lightened their long corn bets by 1% last week and other reportable speculators were net sellers of the yellow grain for a fifth consecutive week. Other traders’ net long is still average to above average for the time of year, but it has shrunk almost 60% since setting records in January.
Corn futures were under pressure late last week as extended forecasts eased up on earlier predictions for prolonged unfavorable heat in the US Corn Belt. Friday’s forecast also increased rain totals, which are particularly important for filling soybean pods heading into August.
The export demand outlook for US corn and soybeans has also come under question with China largely on the sidelines when it comes to new-crop purchases. Most-active Chinese corn futures on Friday hit their lowest levels since November and soybean meal demand there has been reportedly slower.
December corn fell 4% over the last three sessions and November soybeans lost 2.6%. For soybeans, that was nearly identical to the gains through July 20 when speculators staged their biggest soybean buying week since April.
SOYBEANS AND WHEAT
Money managers added more than 13,000 futures and options contracts to their soybean net long in the week ended July 20, lifting it to 95,874 contracts. That is their most bullish view since mid-June and was largely the result of new longs.
Funds’ soybean optimism has been trending positively since late June. November soybean futures are up about 3% since then though they are nearly $1.30 per bushel off the early June contract high.
Their soymeal stance has been roughly unchanged since the end of May, though December futures are about 7% lighter since then. Soybean oil futures are more than 20% off the recent mid-June lows, but funds’ views are not largely different than they were then.
Money managers through July 20 extended their net long in soybean oil futures and options to 57,147 contracts from 48,927 a week earlier, their biggest buying week since April. They added nearly 5,000 contracts to their soybean meal long, raising it to 21,497 futures and options contracts.
CBOT wheat futures jumped 10.5% in the week ended July 20, among the biggest five-day gains in recent years for the most-active contract. That was tied to extremely poor conditions for wheat in the northern US Plains and Canada along with uncertainty for crops overseas.
Money managers were expected to have easily wiped out their Chicago wheat net short through July 20, but instead they increased it to 3,770 futures and options contracts from 23,636 a week earlier. Open interest remains historically light for the date, but it jumped 4.5% last week after earlier this month reaching the lowest levels since 2009.
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