Speculators dialed back their negative views on corn last week and took a slightly less pessimistic stance on wheat, but any positives were outweighed by a much more bearish attitude to the soy complex. Funds still hold a very unfavourable view towards Chicago-traded grains and oilseeds as a whole, a theme that has been in place since mid-March.
In the week ended May 23, hedge funds and other money managers reduced their net short position in CBOT corn to 176,503 corn futures and options contracts from 203,909 contracts in the previous week, according to data from the US Commodity Futures Trading Commission
The fall in bearish corn bets mostly stemmed from the most aggressive short position-covering in the yellow grain since the week ended February 14. Spec views toward the wheat contracts were very little changed last week as the market waits on harvest reports to start rolling in from across the Northern Hemisphere next month. Money managers made a relatively small cut to their net bearish stance on Chicago wheat to 113,211 futures and options contracts from 121,385 contracts in the week before.
In an opposite move, funds shaved marginally bullish bets on K.C. and Minneapolis wheat last week. They trimmed their K.C. net long to 2,166 futures and options contracts from 2,641 in the week prior and cut their Minneapolis long to 2,983 contracts from 3,166. According to trade sources, funds have been net buyers of corn and wheat since last Wednesday, which was supported by short-covering and the continued wet weather pattern in the United States that is seen as a potential supply risk for both grains.
In the week ended May 23, funds held a record bearish combined view of soyabeans and its oil and meal byproducts of 106,437 futures and options contracts. The previous record short position of 90,485 contracts was set in the week ended April 18, 2017, narrowly edging out the 88,616-contract combined short on March 1, 2016. Soyabean futures were under pressure last week, after a steep drop in Brazil's currency encouraged mass farmer selling there. This sparked concerns over a likely slowdown in demand for the US product, and the week wrapped on May 23 with funds selling CBOT soyabeans at the most aggressive rate since early April.
Money managers sharply extended bearish soyabean bets after having maintained a relatively steady stance since mid April. The new net short of 62,355 futures and options contracts - compared with 36,523 in the week prior - represents the funds' most pessimistic soyabean stance since March 1, 2016. Soyabean meal positions took their biggest hit since late March and were also a heavy factor in the negative attitude toward the soy complex last week. Funds now hold a net bearish view of 35,461 futures and options contracts versus 11,688 in the previous week, and the new stance is also the most pessimistic since March 1, 2016. Soyabean oil had been steadily climbing out of bearish territory since mid April, but that progress was halted last week as funds slightly extended their net short to 8,621 futures and options contracts from 6,008 contracts in the previous week.
The soyabean tone has soured even further in the days after as funds have carried on selling the oilseed and its products since last Wednesday, and July soyabean futures hit their lowest levels in 13 months on Friday. The active selling was spurred by continued Brazilian pressure on US demand and the idea of more US soyabean acres for the current growing seasons as some Midwest farmers have struggled to plant corn amid an anomalously wet spring.
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