NAPERVILLE: Speculators last week ended their record selling streak in Chicago-traded corn, but they posted a second consecutive week of heavier selling in soybean meal and, to a lesser extent, soybeans.
However, commodity funds may have accelerated selling across the soy complex late last week as prices plummeted on big trading volumes, a potential sign that bullish soy investors were finally exiting long positions as they had in corn. That was especially true Wednesday and Thursday, but the recent position data only covers through Tuesday. The US Commodity Futures Trading Commission on Friday published its Commitments of Traders (CoT) report for the week ended March 21, its first normally timed CoT release in eight weeks.
The data, which was lagging after a ransomware attack on a third-party provider, is now fully up to date. In the week ended March 21, money managers reduced their net long position in CBOT soybean futures and options to 110,786 contracts from 127,661 a week earlier. That degree of selling was only slightly more than the trade had expected, and the resulting net long was a 15-week low. In soybean meal futures and options, money managers cut their net long to a 14-week low of 115,214 contracts from 133,970 in the prior week, both historically large positions.
Funds’ moves in beans and meal in the latest two weeks were driven by reductions in gross longs. Money managers through March 21 extended their net short in CBOT soybean oil futures and options to 5,718 contracts from 1,189 a week earlier, and their new stance is the most bearish since May 2020.
New gross shorts have dominated in oil for the latest three weeks. In the week ended March 21, most-active CBOT soybean futures fell 1.8%, new-crop November soybeans shed 3.2%, soymeal lost 4.3% but soyoil added 0.1%. In the three sessions since, most-active soybeans fell 2.6%, November beans fell 1.8%, soymeal dropped 3.4% and soyoil declined 5.3%. Through March 23, November soybeans had closed lower in 13 consecutive sessions, the longest such streak in at least 50 years, but the run was broken Friday.
Trade estimates call for robust selling Wednesday through Friday in beans and oil, but estimates were also critically underdone when funds staged their record weekly sell-off in corn in late February. The weekly records for heaviest managed money selling in futures and options are as follows: soybeans 61,393 contracts (November 2019), soymeal 29,801 contracts (March 2017) and soyoil 44,913 (October 2017).
Money managers were modest buyers of CBOT corn futures and options in the week ended March 21 after selling nearly 300,000 contracts over the previous four weeks. They reduced their net short to 41,896 contracts from 54,134 a week prior, which had been their first bearish stance since August 2020.
In CBOT wheat, money managers cut their net short for a second consecutive week, to 86,500 futures and options contracts from 95,257 a week earlier.
Gross shorts were covered in both corn and wheat last week, but new longs were more prominent in corn.
In the week ended March 21, most-active CBOT corn futures rose 1.5% but CBOT wheat fell 1.9%. Between Wednesday and Friday, corn added another 2.1% and wheat rose 0.8%.
Wheat and corn strengthened significantly on Friday as reports swirled that Russia might halt wheat exports because global prices have plunged, hurting local producers. It was later reported Russia would not halt exports, but rather set a minimum sales price, which could indirectly limit exports. China has also been in the market for US corn, having earlier this month made its biggest weekly purchase in two years.
Money managers through March 21 trimmed their modest net shorts in Kansas City and Minneapolis wheat futures and options, but they established their most bearish position in ICE cotton since April 2020 with a net short of 24,255 contracts.
They also flipped back to a net short in CME lean hog futures and options with heavier selling on the week, and the net short of 16,575 contracts is funds’ largest since July 2007. Karen Braun is a market analyst for Reuters. Views expressed above are her own.