Funds restore bearish views in CBOT corn, ease bullishness in beans, meal -Braun

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NAPERVILLE — Speculators’ views in Chicago-traded soybeans and soybean meal last week fell to the least bullish levels since November, while funds cranked up bearish bets in CBOT wheat and returned to the short side in corn.

Money managers’ net longs in beans, meal and Kansas City wheat as of April 25 still outweighed the net shorts in CBOT and Minneapolis wheat, corn and soybean oil, but the combined net long dipped below 30,000 futures and options contracts for the first time since August 2020.

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August 2020 was also the last time funds held a combined net short in U.S. grains and oilseeds. Since then, the combined net long hit an all-time high near 840,000 futures and options contracts in April 2022.

CBOT futures faced significant pressure in the week ended April 25. In the July contracts, soybeans and soymeal fell 5%, corn and soyoil shed around 6% and CBOT wheat plunged 8%.

Money managers flipped to a net short position in CBOT corn futures and options of 15,297 contracts as of April 25, compared with their net long of 49,434 a week earlier. That move was almost evenly split between new gross shorts and the reduction of longs, and it snapped funds’ five-week corn buying streak.

On the commercial side, net buying in corn futures and options among producers, users and other merchants exceeded 65,000 contracts during the week, equivalent to around 325 million bushels. Gross shorts in that category fell to the lowest levels since June 2020.

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Money managers through April 25 increased their net short in CBOT wheat futures and options to 113,012 contracts from 102,983 a week earlier as new shorts continued to pile on.

The only period in which funds were more bearish toward CBOT wheat was between July 2016 and January 2018. Open interest in CBOT wheat futures and options as of April 25 was the date’s lowest since 2009, and open interest is 37% lighter now than in January 2018.

In the week ended April 25, money managers reduced their net long in CBOT soybeans by nearly 48,000 to 87,208 futures and options contracts, a 22-week low. Most of that was long liquidation, and although funds added nearly 9,000 gross shorts, they remain historically light on bearish soy bets.

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Money managers’ bullish bets in CBOT soybean meal futures and options hit a 21-week low on April 25 of 86,373 contracts, down from the prior week’s net long of 105,682. Like beans, funds were predominantly pulling longs out of meal during the week while gross shorts ticked upward.

As of April 25, money managers’ stance in CBOT soybean oil futures and options was the most bearish since August 2019 at 19,555 contracts versus the net short of 15,743 a week earlier. Fund selling has become a recent mainstay in soyoil, occurring in 18 of the last 23 weeks.

ADDITIONAL PRESSURE

The downturn continued for corn and wheat futures between Wednesday and Friday, likely increasing bears’ recent momentum in the grains. July corn fell 3.7% over the last three sessions, including the most-active contract’s worst one-day loss since July on Thursday as China canceled more U.S. corn cargoes.

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Corn futures finished higher on Friday but had fallen to $5.72 per bushel during the session, the most-active contract’s lowest level since July.

Most-active CBOT wheat fell nearly 3% over the last three sessions and featured a dip on Friday to the lowest levels since July 2021. The Kremlin on Friday reiterated that the Ukraine grain export deal’s outlook is not good, and Russia may stop cooperating with the initiative from May 18 if its requests go unfulfilled.

Negative sentiment in grains and oilseeds has partially stemmed from Brazil’s massive soybean and corn crops creating intense competition for U.S. supplies. The planting pace of U.S. corn and soybeans has been running at an above-average pace despite concerns about widespread cooler weather.

July soybeans added a couple cents between Wednesday and Friday, though CBOT meal futures fell 0.6% and oil dropped 0.9%. Most-active soymeal on Thursday hit five-month lows, and July soybean oil on Thursday and Friday touched 50.57 cents per pound, the most-active contract’s lowest since mid-April 2021. Karen Braun is a market analyst for Reuters. Views expressed above are her own.

(Writing by Karen Braun Editing by Matthew Lewis)